Bitcoin Miner - Learn bitcoin mining from a real expert!

I mine for Bitcoin. I show what I run under the hood while Bitcoin mining and what others who mine Bitcoin are up to. I'm also on Twitter, follow @BitcoinMiner Got something to add? Feel free to submit a post of your own.

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What is Bitcoin mining and how you can be a Bitcoin miner

What is Bitcoin mining? Bitcoin mining is how Bitcoin transactions are validated and confirmed by the Bitcoin network. Bitcoin miners create a new block by solving a proof of work problem that is chained through cryptographic proof to the previous block.

Each block builds upon the previous one creating a blockchain. Every transaction in the blockchain can be proven. In this way, the Bitcoin network can come to distributed consensus as to how many Bitcoins (100,000,000 satoshis) are allocated to each public key address.

What is a Bitcoin miner? A Bitcoin miner is a computer specifically designed to solve problems according to the proof of work algorithm. Currently, highly specialized chips called ASICs, Application Specific Integrated Circuits, are used as Bitcoin miners. There are many places where you can buy a Bitcoin miner.

What is Bitcoin? Bitcoin is an internet protocol that enables the transfer of value over a communications channel like the Internet or radio.

One of its first applications is as a decentralized digital currency. Think of it like being able to send a gold coin as easy as you send an email.

But there will be a lot more applications of this blockchain technology. It will enable all types of amazing things like self-driving cars that are able to pick up passengers and pay for their own maintenance. Or a refrigerator that is able to pay for groceries to restock itself.

Bitcoin is changing the world of finance the same way that the Internet changed publishing. When everyone has access to this type of powerful financial technology then the whole world benefits as trade becomes cheaper, faster, simpler and more efficient.

The Bitcoin Network

The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin wallet software. Transactions are recorded into a distributed, replicated public database known as the blockchain, with consensus achieved by a proof-of-work system called "mining". The protocol was designed in 2008 and released in 2009 as open source software by "Satoshi Nakamoto", the name or pseudonym of the original developer/developer group.

The network requires minimal structure to share transactions. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will. Upon reconnection, a node downloads and verifies new blocks from other nodes to complete its local copy of the blockchain.

Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.

The Computationally-Difficult Problem

Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the target in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented.

The Difficulty Metric

The difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.

Reward

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks.

Additionally, the Bitcoin miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

Transactions

A bitcoin is defined by a sequence of digitally signed transactions that began with the bitcoin's creation as a block reward. The owner of a bitcoin transfers it by digitally signing it over to the next owner using a bitcoin transaction, much like endorsing a traditional bank check. A payee can examine each previous transaction to verify the chain of ownership. Unlike traditional check endorsements, bitcoin transactions are irreversible, which eliminates risk of chargeback fraud.

Although it is possible to handle bitcoins individually, it would be unwieldy to require a separate transaction for every bitcoin in a transaction. Transactions are therefore allowed to contain multiple inputs and outputs,[4] allowing bitcoins to be split and combined. Common transactions will have either a single input from a larger previous transaction or multiple inputs combining smaller amounts, and one or two outputs: one for the payment, and one returning the change, if any, to the sender. Any difference between the total input and output amounts of a transaction goes to miners as a transaction fee.

How Bitcoin Mining Works

To form a distributed timestamp server as a peer-to-peer network, bitcoin uses a proof-of-work system similar to Adam Back's Hashcash and the internet rather than newspaper or Usenet posts. The work in this system is what is often referred to as bitcoin mining.

The mining process involves identifying a value that when hashed twice with SHA-256, begins with a number of zero bits. While the average work required increases exponentially with the number of leading zero bits required, a hash can always be verified by executing a single round of double SHA-256.

For the bitcoin timestamp network, a valid "proof-of-work" is found by incrementing a nonce until a value is found that gives the block's hash the required number of leading zero bits. Once the hashing has produced a valid result, the block cannot be changed without redoing the work. As later blocks are chained after it, the work to change the block would include redoing the work for each subsequent block.

The best chain (black) consists of the longest series of transaction records from the genesis block (green) to the current block or record. Orphaned records (purple) exist outside of the best chain.

Majority consensus in bitcoin is represented by the longest chain, which required the greatest amount of effort to produce. If a majority of computing power is controlled by honest nodes, the honest chain will grow fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of that block and all blocks after it and then surpass the work of the honest nodes. The probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added.

To compensate for increasing hardware speed and varying interest in running nodes over time, the difficulty of finding a valid hash is adjusted roughly every two weeks. If blocks are generated too quickly, the difficulty increases and more hashes are required to make a block and to generate new bitcoins.

Bitcoin mining is a competitive endeavor. An "arms race" has been observed through the various hashing technologies that have been used to mine bitcoins: basic CPUs, high-end GPUs common in many gaming computers, FPGAs and ASICs all have been used, each reducing the profitability of the less-specialized technology. Bitcoin-specific ASICs are now available. As bitcoins become more difficult to mine, computer hardware manufacturing companies have seen an increase in sales of high-end products.

Computing power is often bundled together or "pooled" to reduce variance in miner income. Individual mining rigs often have to wait for long periods to confirm a block of transactions and receive payment. In a pool, all participating miners get paid every time a participating server solves a block. This payment is proportional to the amount of work an individual miner contributed to help find that block.

The Bitcoin Mining Process

A rough overview of the process to mine bitcoins is:

New transactions are broadcast to all nodes.

Each miner node collects new transactions into a block.

Each miner node works on finding a proof-of-work code for its block.

When a node finds a proof-of-work, it broadcasts the block to all nodes.

Receiving nodes validate the transactions it holds and accept only if all are valid.

Nodes express their acceptance by moving to work on the next block, incorporating the hash of the accepted block.

How Payment Verification Happens

Upon receiving a new transaction a node must validate it: in particular, verify that none of the transaction's inputs have been previously spent. To carry out that check the node needs to access the blockchain. Any user who does not trust his network neighbors, should keep a full local copy of the blockchain, so that any input can be verified.

As noted in Nakamoto's whitepaper, it is possible to verify bitcoin payments without running a full network node (simplified payment verification, SPV). A user only needs a copy of the block headers of the longest chain, which are available by querying network nodes until it is apparent that the longest chain has been obtained. Then, get the Merkle branch linking the transaction to its block. Linking the transaction to a place in the chain demonstrates that a network node has accepted it, and blocks added after it further establish the confirmation.

Bitcoin Mining Pools

As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving any reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into pools so that they could share rewards more evenly.

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How To Avoid Bitcoin Cloud Mining Scams

Bitcoin investment has grown day by day, with cloud mining rising as the new and most efficient strategy to making sound profits. However, for you to invest in this area, you are required to be dependent on bitcoin cloud mining companies, but rarely will you land in the hands of legit ones. Here is how you can know as well as avoid bitcoin cloud mining companies that are scams

1. Don’t have any ASIC miner vendor support

It is true that most of these legit bitcoins cloud mining companies’ hard-wares are expensive but worth noting it ASIC vendors will voluntarily and out of appreciation make not only acknowledge but also make public posts about the company they are dealing with.

The purpose is to demonstrate that the company is one of their clients. Worth noting also is that these advertisements are free, and as such, the bitcoin cloud mining company mentioned acquires confidence. As such, most Bitcoin cloud mining companies will request these postings so as they can become known in the marketplace and help promote them as a legitimate company in the highly competitive bitcoin market.

Therefore, there should be no reason why any ASIC vendor wouldn’t support the company with whom they do business.

2. Lack relevant photos of both their data center and Bitcoin mining hardware

It is quite suspicious why a bitcoin cloud mining company would provide you with details of their data center but when you request a relevant photo regarding the details provided, you are subjected to a variety of odd excuses why they don’t have the photo.

Here is the warning: A legitimate bitcoin cloud mining company should provide both the datacenter details and its relevant photos whenever asked and send them to whoever asks for them.

Companies that are not scammers, on the other hand, will provide pictures of bitcoin miners whenever asked.

For example, a legitimate company may even provide you a copy of their electric bill to prove that they are legitimate. Scammers will do all they can, and come up with a myriad of excuses, why they cannot provide this or that piece of evidence to verify their legitimacy.

Always bear in mind that companies can fake data centers. So be extremely cautious and demand proof that the company is not fake before doing business with them.

3. Neither does it have a public address or user selectable pool

A legit bitcoin cloud mining company will have a public mining address. It is a sign of legitimacy and evidence that the company is mining their available bitcoins on a network. However, you should keep an eye out since some of the companies have been known to borrow addresses that they don’t own.

Along with this, check whether the company owns the address or not. You can request the company to sign blocks, and if it is unable to do so, then the company doesn’t own the address.

In addition, it is worth noting that only those companies that can sign blocks own the address used. It is an important means of attesting to the legitimacy of a Bitcoin cloud mining company.

Did you know that a scam bitcoin cloud mining company that you purchase hashing power from will not be able to direct the purchased hashing power to your preference mining pool? This is another indicator of the company’s illegitimacy.

4. They operate their website domains as anonymous

Run, run, run (!) if you come across any Bitcoin cloud mining company website that is anonymous. It is a red flag that the company is a scam. But why? Any owner of any cloud mining company website domain should never at any moment be anonymous since they must provide full contact details during the registration process of their website domains.

As such, legit Bitcoin cloud mining company website domains will not appear as anonymous and one can view all their contact details with ease- they are not hidden. It's only scammers who will hide their contact details to eliminate any chance of future tracking.

5. Presence of social networking and referral programs for Bitcoin cloud mining

It is true that the mining market sector has very sharp, thin profits and as a result, it gets harder for companies to pay 5%, and even harder to pay 10% referrals. If you come across a company paying these rates, BEWARE! A bitcoin cloud mining company that has referral programs, claiming to pay almost or equal to 10% almost certainly means that the company is fake.

It is worth noting that experts in this industry echo that referral programs are used as a hook to lure in unsuspecting bitcoin miners. Companies that provide posters or advertisements about financial incentives are merely trying to hide the true, illegal, nature of their company.

6. Doesn’t have an exit or withdraw option on its website

Any legitimate bitcoin cloud mining company that you engage should allow you to both sell the GH as well as withdraw your earnings. However, scammers will always act the opposite. They will allow you to sell the GH buy on their website, there is no specific place you can withdraw your earning.

That is not the way a real bitcoin company operates and is a major indication that you should leave the site immediately and not do business with them.

In addition, if the cloud mining company doesn’t credit any trade bitcoin or sale option of your GH, then they are crooks and you should stay away from them.

7. Those that offer “guaranteed profit.”

Scammers use any sensible and attractive way to get you to use their site, and that’s why you will find some of these fake bitcoin cloud mining companies offering a specific, guaranteed profit. This is another reason to stay away. Why? In the bitcoin mining world, there is no such thing as certain profit.

Worth noting is that the bitcoin mining world is very unpredictable. As such, no one has any idea what tomorrow’s BTC price will be and certainly has no clue as to what the price will be in the coming weeks or months. There is no way to guarantee profits. If they claim they can, then it is a scam.

Meanwhile, there are totally legitimate services. For example, one can currently trade bitcoin for goods, services, and exchange it for other currencies, and the applications of this technology are growing in number over time

8. Unlimited IPO

Did you know that the amount of GH that you can sell is always limited by the amount of mining hardware in your data centers? Since this is the case, legitimate companies will always have limitations, particularly in the amount of GH one can sell. Worth noting is, the process of getting more hardware in a bid to sell more GH will always consume more time during ordering and delivery process. As such, any company that doesn’t limit sales, it’s all a scam- BEWARE!!

Scam cloud mining companies are common and many have fallen prey to their schemes. It only through the above tips that you can avoid them.

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How to Mine Bitcoins?

Not that long ago, barely anyone (except for computer geeks) had even heard of Bitcoin. After its price skyrocketed in the fall of 2013 and after the spectacular crash in early 2014, more and more people became interested in this “cryptocurrency,” and some of them even started mining it.

While it’s becoming more and more difficult to mine - without spending a lot of money upfront - it’s not impossible to turn a good profit if you can afford the hardware. But how does one mine Bitcoins and what is needed to mine them?

Getting started with Bitcoin mining

Let’s assume, that you already have hardware capable of mining Bitcoins (you’ll find information on that further in the post) – to mine your first Bitcoin, follow the steps below:

1. Get a “Wallet”. To start mining Bitcoins the first thing you will need is to become better acquainted with what it is by installing a wallet for your new cryptocurrency. There are many different wallets available, and you can choose between an online wallet in the cloud, a wallet on your PC, or even one on your smartphone.

The safest option is getting one on your computer (and the only one if you want to mine), simply because you are the one who is in possession of your coins. Make sure that your wallet has a double-identification requirement or that you store it on a computer that has no access to the Internet. Don’t forget your wallet credentials as they are non-recoverable.

2. Join a Bitcoin mining pool. Make sure you choose a quality and reputable pool. Otherwise, there’s a risk that the owner will steal the Bitcoins instead of sharing them among those who have been mining. Check online for the pool history and reviews to make sure you will get paid for your efforts.

3. Get Bitcoin mining software on your computer. There are two different types - one which focuses on the CPU power and the other on GPU. The latter is much more powerful and much easier to set up for beginners.

4. Go to your Bitcoin mining pool account and fill in your wallet address (the one which you just created).

5. After that, it’s time to create sub-accounts in your pool profile. Each of them will be used as a “worker” (you can have more than one running on your computer, depending on hardware resources). Once you are done with creating your sub-accounts, add them to your Bitcoin mining software together with the URL of the pool. That’s it – you are ready to mine.

Is it that easy?

Although the process of mining Bitcoin is very straightforward and you can start mining in a matter of minutes, because of the increasing difficulty of successfully mining Bitcoins, hardware requirements are now extremely high and unless you can afford a quality setup, there’s little point in starting.

There are four main types of Bitcoin mining hardware – the list below will introduce you to the changes which shaped the Bitcoin industry in the past few years:

CPU

When it all started, everyone (the few people who knew about it) was using CPUs to mine. Not only was it the only known way but it was enough to use your personal computer’s CPU to get results. Nowadays it would take years and you’d probably not make a single Bitcoin simply because the difficulty keeps increasing.

The huge leap: GPU

Once CPUs became less efficient and it became harder to mine with them, miners started using high-end GPUs which turned out to be much more effective for the Bitcoin network.

The beginning of the GPU mining era has been one of the most profitable in terms of Bitcoins mined as GPUs brought a staggering increase in efficiency while using much less power compared to CPU. What’s interesting, the AMD architecture of graphics cards turned out to be much more efficient compared to its main competitor nVidia.

The next step: FPGA

Although the transition between GPU and FPGA wasn’t as spectacular as the one between CPUs and GPUs in terms of increase in mining efficiency it marked the era of specially manufactured hardware used solely to mine Bitcoins. This was also the time of strong Bitcoin hardware commercialization.

The biggest change compared to GPU that Field Programmable Gate Array has brought is the reduction in consumed power which decreased 5 times while giving a 30% boost in mining efficiency. This is the time when big players started joining the Bitcoin game.

The now: ASIC

The final (at least for now) method of mining Bitcoins is using the Application-Specific Integrated Circuit. ASIC chips are created with only one thing in mind - to mine Bitcoins. Unlike GPUs and CPUs, they cannot be used for anything else.

Hardware specialization became the only accepted form of existence in the cryptocurrency mining industry and as of now, there’s nothing that could replace ASIC.

Because the transition was again not as spectacular as the one between GPU and FPGA regarding boost in mining power one of the most important features of every ASIC-based device is its power efficiency. If its energy efficient enough to cover the energy price with its output and still pay for itself it may be considerably profitable.

The problem of energy efficiency is important also because with no alternative ASIC chips are believed to stay and be the sole hardware used to mine Bitcoins in the future.

Can I mine bitcoins on my own?

If you can afford top notch hardware you could mine on your own without registering with a Bitcoin mining pool. While this would give you independence and save you money on fees (luckily there are zero fee pools), your payout would be infrequent.

On the other hand, if you join the pool each block is mined much faster and you will get more frequent yet lower payouts. With the fluctuating prices of Bitcoins, it’s better to have cash at hand as you can sell your coins and buy them back after changes on Bitcoin markets.

Should I join the craze?

Of course! There are still many Bitcoins to be mined and the Bitcoin industry is huge. The question is not whether you should be mining but whether you should sell what you mine or store it and wait for the price to skyrocket - as you may have seen Bitcoin is capable of breaking $1000 per coin and considering its amount is limited the price will likely rise again in the near future.

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How to Start Bitcoin Mine – Invest Tactically and Earn Generously

It is common knowledge that money makes the world go around. Love it or hate it our society simply revolves around it. In the conventional or traditional world that we all live in, whether we like it or not, whenever governments need more money, they borrow. Until now the scene has been dominated by classic, strong currencies like the US dollar, the Japanese yen or the EURO but in recent years the scene has given way to a digital, more flexible currency which is solely regulated by the market wants and needs.

As all the currencies in the world start to turn digital, the financial world is changing. In the digital era which we live in it is estimated that more than half of all the existing money in the world does not exist in printed form (they are only virtual). One of the best examples of digital currency is Bitcoin.

Governed by complicated encryptions which are set up to regulate and control the generation of the currency, verify transfers and identify operations, Bitcoin is a currency which operates and exists independently from any central bank.

The Bitcoin money is part of this new category, one which is produced by people and unregulated by anyone except the free market. Its users produce it and power it. BitCoin users see their currency as money destined for the internet environment.

This highly decentralized peer-to-peer network offering fast worldwide transactions has developed too quickly become one of the most used and trusted out there. Money does not expand unless you know the art of investing. Today, the virtual world is the best place for investing money.

Bitcoin Mine of Money

The Bitcoin network is currently used extensively by people to transfer money to each other. It is difficult to keep track of these transactions so the creators came up with a simple solution. Instead of keeping endless records the system collects all the transactions performed over a certain period and compiles a list, known as a block. Through mining software, the user must confirm those transactions by writing them into a general ledger.

Special software is needed to solve the math problems and earn bitcoins in exchange. It is not very difficult to collect data and earn bitcoins out of it with the help of a good computer. So the network has to find a way to make things more entertaining and difficult to prevent people from hashing hundreds of transaction blocks each second. That is why the protocol introduced the “proof of work” to allow someone access to a block. Bitcoin is a viable way of making monetary transactions online.

What is the best bitcoin mining hardware?

For someone to earn a decent amount of bitcoins having special software is not enough and good bitcoin mining hardware is also a must. In the beginning, miners used a central processing unit to mine but because it was working slowly this system was soon replaced by the graphical processing unit.

Its replacement proved capable of hashing data up to 100 times faster all while consuming visibly less power and thus requiring fewer resources. At the end of 2011, a new and custom bitcoin mining hardware pushed the performance standards to new levels.

The first models of this new bitcoin mining hardware were not difficult to use as it was based on field-programmable gate array processors and was connected to computers through a simple USB connection. With this new bitcoin mining, hardware miners noticed they were using much less power than with a CPU or GPU. For the first time, they were able to build concentrated mining farms. That brought the concept of grinding money to a whole new level.

Some of the today's most competitive and best-performing Bitcoin mining hardware is the application-specific integrated circuit. The miners are thrilled with it as it works at unprecedented levels of speed while power requirements have been considerably lower than with any FPGA or GPU mining rigs. There are several companies that sport great reputations which have come up with excellent products.

There is a consistent price difference between these new bitcoin mining hardware sets so there is obviously a difference when it comes to their technical capacity. The most important factors which determine the best bitcoin mining hardware are cost and electrical efficiency. It is difficult to get profit out of Bitcoin but with the right bitcoin mining hardware one might stand a chance.

As the popularity of bitcoin mining is growing, the price for bitcoin mining hardware is rising as well. The value of a bitcoin is constantly going up so the network is compelled to make things even more difficult for the miners who are passionate about grinding money. This makes it impossible to compete profitably without a Bitcoin ASIC system.

Some models of Bitcoin miners include the vastly popular Antminer S9, S7, S5 and U3, ASICMiner BE and BE Tube, BTC Garden AM-V1 616 GH/s, Avalon 2 and 3, VMC PLATINUM 6 MODULE and USB miners.

Learn to avoid scams

One of the biggest threats for Bitcoin is a scammer and thus traders have to be careful as well as vigilant on this issue. In case you are operating any bitcoin mining hardware, you should consider that there is always the possibility to invest in one of the legitimate Bitcoin cloud mining contracts out there.

Although this option might seem a simpler alternative to a bigger, more complex situation, one must be careful to avoid the large number of Bitcoin cloud mining scams which have been reported. Bitcoin mining is not an activity for everyone because it requires agility from the miner and the proper hardware and software to back it up.

To make any profit out of this activity one must keep up with the constant changes and upgrades of the bitcoin mining hardware requirements. This activity is a competition ruled by those who come fully prepared for mining quickly and efficiently with the latest equipment.

Get ready to start to go out there and mine! Time is money after all!

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Bitcoin, Blockchain and Remittances

Should You Use Bitcoin and Blockchain Technologies for Remittances?

Bitcoin has for a while been seen as the future of currency. As a totally digitised form of money, it seems like the next logical step in the evolution of finance. After all, we don’t see most of the money we use. Coins and notes are soon to be a thing of the past.

But Bitcoin hasn’t taken off like its founders expected it to. Its blockchain technology is still viewed by many with suspicion, with few laymen knowing what it is or how it works.

Nonetheless, recent developments have seen startups and big banks adopting blockchain technology for fund transfers. Santander, UniCredit, UBS, Reisebank, CIBC, ATB Financial and the National Bank of Abu Dhabi have all started experimenting with fintech company Ripple for cross-border payments.

It may soon become the norm, so now is a good time to examine the pros and cons of using blockchain technology and cryptocurrencies for remittances.

The advantages

Resistant to fraud

Blockchain technology works with automatically generated ledgers. Any transactions are recorded instantly into a ledger. Because the ledger has no central operator, the transaction is made irreversible and cannot be tampered with.

Best exchange rates

Ripple uses a path-finding algorithm which finds the best possible exchange rates. Since blockchain is all digital, implementing these kinds of technologies is simple and practical.

Instant transfers

Digital transfers can be done in seconds, as opposed to the week or more that most international bank transfers take.

Disadvantages

Possible vulnerabilities

For the most part, blockchain technology has proven secure enough to rely on. However, it has not been around for long enough, or used on a large enough scale, to conclusively state that there are no major vulnerabilities. It could be that once more banks and companies start utilising the technology, hackers will start finding new ways of defrauding the system.

Unstable rates

Cryptocurrencies are much less stable than most other currencies. Their values can swing widely from day-to-day, so if you plan on keeping your money in digital form for any amount of time, you may be in for an unhappy surprise.

Lack of regulation

Cryptocurrencies have not been around for long enough to be as well-regulated as other currencies. For now, that means there are less restrictions on bitcoin and the like. However, that could change as it becomes more mainstream and regulators get more invested in its safety.

Two step process: more charges

It takes a two step process to transfer money with cryptocurrencies. The money has to be converted into the cryptocurrency, and then converted back into the required currency. The volatility of cryptocurrencies, as well as the lack of sufficient liquidity, can cause fees to rise, rather than fall. That is, until cryptocurrencies will be governmentally accepted and enable you to perform activities such as bill payment, car purchase, property purchase, mortgage repayments etc.

Should I use blockchain technology for remittances?

The short answer is, it depends. There are definitely benefits, and it is likely to become a more prominent option in future. It’s especially attractive if you would rather not wait for money transfers to come through.

On the other hand, you might not want to be an early-adopter. While you could be one of the first to benefit, you could also be one of the first to crash and burn. The exchange rate volatility could lose you a large percentage of your money, if something was to go wrong during the process. Hackers might find a way to steal your hard earned wages.

The truth is that blockchain technology works, even on a large scale, on paper. Every crack seems to have been filled. However, we can’t truly know until it’s too late.There are some new related startups working in that field, but none of them is mature enough to indicate

Hopefully we’ll soon have plenty of evidence of the reliability of blockchain technology as a global financial system. For now, it’s a good option if you're willing to take the small risk. If, however, you are very risk averse, it may be a good idea to wait a while.

[bitcoinminer-blog]

What is Bitcoin Mining and Why It Is Simple

Just a few years ago no one had ever even heard of it. Now, Bitcoin is quite frequently close to being the news of the day in the business section of every news portal.  Usually due to its high price fluctuations and the stories of people it has made into millionaires (or broke, after a bubble burst). But for an average Joe, it’s still a complete unknown.

What is Bitcoin mining and what does “Bitcoin mining” stand for?

Mining Bitcoins is a process which validates transactions in the Bitcoin network with the use of hardware connected to it. To measure the speed of the mining operation the network uses hashes per second. To be more specific, the process itself is done by running SHA256 double round hash verification process but that probably doesn’t tell you much if you are a beginner.

Because this “validation” process requires a lot of energy users are compensated in Bitcoin by the network, which comes from two sources. Some are newly created Bitcoins, which just joined the network (their number is restricted and it’s becoming harder to mine new coins) and from fees that each user pays when he sends Bitcoins from his wallet to other users.

Of course, the more powerful the hardware you have and the more power you can contribute to the network, the greater share in each obtained Bitcoin block you will receive, which is a fair exchange.

Why have transactions to be validated?

Every transaction is recorded in the Bitcoin’s public ledger – a block chain. This is used to verify that the transactions actually took place, inform the network of transactions which have just taken place and helps to distinguish between legitimate Bitcoin transactions and those which pretend to be genuine.

Thanks to that, it’s impossible to re-send your Bitcoins – or, simply speaking – to send the same Bitcoins twice from your wallet before they get back to it in the form of a transaction.

Why are so many resources required?

The creator of Bitcoin network has intentionally designed it to be resource intensive and to increase in difficulty. After each specified number of blocks mined, the difficulty level increases and it becomes more and more difficult to mine the next Bitcoin - all the way to around a hundred years from now when the last Bitcoin in the network will be available to the public (ie. it will be mined out).

Thanks to that, Bitcoin works as a decentralized currency in which users are required to make sure all transactions are genuine, providing security to the whole network, and helping introduce new Bitcoins to the system. In fact, this makes Bitcoin quite similar to other commodities which are mined out of the ground - the only difference is that it’s completely virtual.

In fact, even its difficulty can be compared to the running out of resources such as oil or iron. As they run out in previously known spots people are pushed towards finding new ways of getting to resources which are even deeper on the ground and more difficult to get to.

How does Bitcoin Mining Difficulty work?

Bitcoin network difficulty tells the users how much more difficult it is to mine a new block today compared to conditions in which it would be the easiest. The difficulty keeps changing – every 2,016 blocks it gets adjusted to a level in which the previous 2,016 blocks would have taken two weeks to mine if everyone has been connected to the network and mining simultaneously (which would give 1 block (25 bitcoins) around every 10 minutes).

Because new miners keep joining blocks get created faster. This leads to rising difficulty as the network has to compensate for the lower rate. Of course, one would think whether it’s possible to cheat the system and try to mine blocks at a different difficulty. Luckily, the network will reject anyone who mines without meeting the required difficulty in the verification process.

Another problem that increases the difficulty of mining new Bitcoins are the hash blocks. Because the block has to start with a certain number of zeros the difficulty increases because calculating such hash requires a lot of attempts due to a very low probability. This problem is related with proof of work

Satisfying network requirements – the proof of work

In the Bitcoin network, a proof of work consists of data which was either costly or took a lot of time to produce because of requirements it had to satisfy. The process of checking data has to be very simple and yet bullet-proof. For example, generating a random process with a very low probability can be used (just as mentioned above) to make sure a lot of processes take part in the generation of a genuine proof of work.

Calculating the block and the block reward

Currently, solving the block rewards users who calculated it with 25 Bitcoins (this is estimated to half in 2017 as the number of Bitcoins awarded per block solved halves every 210,000 blocks). One of the biggest misconceptions about Bitcoin is that calculating a block is a process. It can be compared to gambling.

It doesn’t matter whether you mine for one hour or 24 hours, your chances of solving it are the same all the time. This is because you either solve it or not there's no “solving in progress”. Of course, there are calculators available online but they provide you with a pure estimate as the final average of time per block cannot be calculated.

Although the number of Bitcoins is finite, there’s an infinite number of blocks (because transactions are made all the time and Bitcoins awarded for solving blocks consist in part of the fees too).

Even when blocks will be awarding just one Bitcoin, it still may prove itself profitable because at that time the price of one Bitcoin will probably be very high (unless it turns out to be just a fad).

The process of mining Bitcoins may seem to be very complicated but in reality, it’s very simple. People who use their hardware to solve “problems” in the network and help verify transactions are awarded a pay in the form of Bitcoins which come from the fees and from Bitcoins which got just introduced to the system.

[bitcoinminer-blog]

Bitcoin Mining Software and Hardware Tools

There aren't many individuals who are familiar with the term Bitcoin mining tools. The definition of bitcoin mining tools is that it is a way for Bitcoin miners to pool all of their resources together and to share their hashing power and then they split their rewards equally. This is according to a number of shares that they have contributed by sharing a block.

Members of the Bitcoin mining pool are awarded a "share" when they present a valid proof of work that these Bitcoin miners have solved. When the difficulty in the mining field increased to the point where it could take many years for those miners, which are slower at generating a block, Bitcoin mining pools were created to make it quicker and easier.

Therefore, for miners, the only solution to this problem that they could think of was for them to pool all of their resources so that they would have the ability to generate the blocks quicker, so that they could receive a portion of the Bitcoin block reward and on a daily and consistent basis. They wanted to accomplish this otherwise, they would only randomly receive it maybe once every few years.

If you are one of those individuals who do not mine with a Bitcoin mining pool then you are what is called a solo-mine. If this is the direction that you want to take then you will need to ensure that you remain in compliance to the Bitcoin network. If you decide that participating in the Bitcoin mine pool is something that you want to do then you will need to make sure that they are engaging in the proper behavior that is in agreement that you are about Bitcoin.

There have been many cases in which rogue developers have even threatened to release software that would end up hard-forking the network. This would result in tremendous financial damage. Make sure that the Bitcoin mining power, which you direct to a mining pool, does not try or enforce network consensus rules you are not in agreement with.

There are several Bitcoin mining pools that are out there that you have the ability to choose from. It always seems very tempting to pick the most popular pools, smaller pools are better for the health of the network to be able to mine. Several different Bitcoin mining pools that you have to choose from are:

- Slush Pool

- BTCC

- BitMinter

- Kano CKPool

- Antpool

- Eligius

- Bitfury

- F2Pool

- BW Pool

All of these Bitcoin pools are highly recommended and have created a very good name for themselves in the world of Bitcoin. There are also several payment methods for a Bitcoin mining pool. It can be incredibly complex when you are calculating the Bitcoins that are mined.

There have been many calculation schemes that have been invented in an ongoing effort to come up with the fairest method. The top 2 most important types are DGM and PPS and they add risk to the mining pool while their payment is guaranteed for every single share that you contribute. There are several other forms of payment and they include:

- PPLNS

- PROP

- SMPPS

- RSMPPS

- BPM

- CPPSRB

- ELIGIUS

- SCORE

- POT

- Triplemining

If you are one of those individuals who is looking to join a Bitcoin mining pool, looking and thinking of it as a lottery syndicate can be an incredibly helpful thing to do. There are several pros and cons that you should consider before making your decision. Here are the pros and cons of going solo:

Pros

- You don't have to share the reward

- A pool has a much larger chance of solving a block and winning an awarded

- Joining a pool means that you will have a steady stream of income

Cons

- The odds of you receiving an award is significantly decreased

- The reward will be split between all of the pool members

Once you have decided what currency it is that you decide on to mine and the pool that you will be working with then there is no time to waste and you can get started. Once you go on the pool's website you will begin by creating an account and it is just like signing up for any other service on the web. After you have created your account it is important to begin by creating a "worker". For each individual piece of mining hardware that you will be using, you can create multiple workers to handle each piece.

Miners are not allowed to meddle with any of the transaction data that is inside the block. However, if they want to create a different hash they must change the data that they are using. They can do this by using another random piece of data and this is called a 'nonce', and to create a hash, a nonce is used with the transaction data.

The hash must fit the required format, however, if it does not fit, then the nonce must be changed and then the whole thing is hashed again. Patience is key because it can take many attempts to be able to find a nonce that will work and all of the miners that are on the network are trying to do it at the same exact time. This process is how miners are able to earn Bitcoins.

In conclusion, when it comes to Bitcoin mining tools the whole process can be long and sometimes very difficult. The best thing to do to progress is to take it slowly, make the best and wisest decisions that you can because you do not want to lose anything during this process.

Your aim is to gain as much as you can and working through all of this properly and efficiently is the only way to be able to succeed. In this type of activity, you are definitely going to want to succeed rather than fail.

[bitcoinminer-blog]

Bitcoin Mining for the Newly Initiated

Bitcoins have been taking the internet by storm for the past several years now, but what exactly are bitcoins?

Bitcoin is a digital currency, which is widely used across the world as a stable alternative to various forms of legal tender. One of the major benefits of a digital currency is its ability to circumvent the need for a central bank.

This makes bitcoins secure and attractive as a currency since the "printing" of the new currency isn't regulated by any outside agents. Bitcoins solves the problem most digital currencies fail to solve- how to make sure that digital signatures weren't being used multiple times.

The process of bit mining is the act of gaining bitcoin currency by solving math problems or through other means. This allows the Bitcoin miner to perform two very important actions. The first is that by bit mining, you improve the transaction record of bitcoins as a form of currency.

The more used a currency is, the more stable it will be. Bitcoin mining also puts bitcoins in your hands, which is valuable as a means of purchase in many circles as the use of bitcoins grows. In short, bit mining is a process that is useful to you and bitcoin stability as a whole. It is this give and take duality that has made bitcoin currency so popular.

So How Does it Work?

In addition to allowing you to make bitcoins, bit mining also helps ensure that the bitcoin market isn't compromised. The process you go through (which we will discuss shortly) ensures that you gain bitcoins through "legal" channels and prevents abuse of the service.

This is done by dedicating computers to solving problems which are then updated on the bitcoin public ledger of transactions -- also known as the block chain. This proof serves as a means of allowing others to verify that transactions have taken place.

The process of bit mining has been purposely made intensive on computers. This built-in system requires massive work for each computer block involved to ensure that there are no abuses in the system.

In addition to this, each computer devoted space or “block" must have the right credentials to be considered for approval to enter the block chain. This is done via proof of work, which is in essence proof that the problem given by the block was solved properly.

In a nutshell, bit mining is the act of solving problems to gain bitcoins as profit, while building the strength of the bitcoin currency. So, how does it work and how can you get started?

Getting Started with Bitcoin Mining

Bitcoin mining is a legal process. It is mainly accomplished by performing SHA 256 hash verifications (basically solving a problem) in order to ensure that Bitcoin transactions are valid.

This ensures that the info being passed to the block chain (public ledger) is accurate. The speed of bit mining is often measured in hashes per second.

The bitcoin network then compensates miners for their effort by paying those who contribute based on the amount of computer power provided. This payment comes in the form of newly issued bitcoins, transaction fees, and valid transactions when mining. In essence, the more you contribute to the computing process, the larger your share of the reward is when the process is done.

This all sounds complicated, but in essence, the process has been greatly simplified. You can purchase the required materials to begin bit mining from many online stores. These machines simplify a process that once was very difficult and time-consuming to do. One of the simplest ways to handle bit mining is through the use of ASIC bit miners.

An ASIC bitcoin miner is a USB device that when plugged into a USB port will automate the process of mining bitcoins for you. ASIC software's sole purpose is the mining of bitcoins, a job it does efficiently. It is designed to maximize hashing power x 100 while decreasing the power required to do so. In terms of all bit mining products, it is also the simplest to use.

If you are new to bit mining and want to get started, I highly recommend using the ASIC bit miner units to expedite the process. The world of bit mining is large and there is plenty of info and tutorials to check out on the subject.

We have only scratched the surface, but if this sounds interesting to you, I highly recommend you grab ab ASIC bit miner, and try your hand at entering the ever-evolving bit mining market.

[bitcoinminer-blog]

What is a Bitcoin Mining Farm?

A Bitcoin mining farm is a computer data center that is focused on mining Bitcoins.

Take the traditional way of obtaining goods. This usually involves exchanging paper money with the seller in return for the desired item or service. Bitcoins are relatively new to most people. They have no central control through any government institution like common currency does. Their exchange rates are not controlled, nor are other factors like, for example, inflation.

To earn bitcoins one must obtain specially developed software that most miners use. Then, a certain mathematical problem will be assigned that needs a solution. Once a math question has been solved a fixed amount of Bitcoins are awarded to the user who has solved the question. This process ensures that an incentive is being used to drive the user’s interest to further mine.

Security in any financial transaction is always placed at the top of the priority list and Bitcoin security is no exception. Every transaction needs the approval of the bitcoin miner who has initiated the process. Mining is essential in order to keep the Bitcoin network up and running and to ensure its security. Moreover, it helps with keeping the whole network fair as well.

To understand more in depth about bitcoin mining, one must first understand the 2 essential principles of it. In order to confirm a transaction, the bitcoin user must assign enough effort to the block running the whole process. This process itself will create new bitcoins.

In other words, you first need to assign several transactions to a particular block. Secondly, you, as a bitcoin user, must verify the transaction. Thirdly, you pick a particular block and insert it into another block as a hash. A hash is basically an encryption as it shortens the original data from the transaction. A hash is made up of tens and tens of different letters and numbers. The whole bitcoin mining work would be so much easier if that was all that had to be done.

On average, there are about 5-15 new blocks being created every 10-20 minutes. But this can significantly vary between different times of the day. Keep in mind that while in the process of mining bitcoins the system converts all data from the most recently ran block into the above-mentioned hash.

Then, as mentioned above, you must solve the mathematical problem given to you. Once solved, your block will be passed on to the main chain of blocks on the network.

You could also summarize the bitcoin mining process as the process of adding new transactions to the main log of all past bitcoin verified processes. The log is sometimes called a block chain as well. The block chains main function is to confirm all the past and present transactions to the whole network in general.

Again, in simpler words, the verification through the block chain prevents used bitcoins being spent again somewhere else. The whole mining process is designed to be difficult so that the bitcoin miners are able to mine only a certain amount of bitcoins each day.

Blocks that are on its own must have what is called proof of work. Only this will guarantee acceptance and allowed it to be deemed as valid. Proof of work is needed to ensure that the process was difficult enough and that it required a certain amount of time to be completed. This validation process must again be approved by other Bitcoin nodes every time a new block is received.

The name of the process, Bitcoin Mining, has come from the resemblance of mining other valuable resources such as Gold or other Metals. New bitcoin currency is created almost at the same pace as real life metal valuables are being extracted from the ground. The Bitcoin mining process is hard because the block’s header must be less than or equal to the specified amount for it to be accepted by the network.

To make it easier to understand, here’s another explanation:  the process must start with a fixed number of zeros. The probability of that, however, is low. This calls for far too many tries to be made. To solve this problem, and to create a new hash on every round, a nonce is always added. Now that the bitcoin mining has been explained more or less, let's talk about bitcoin mining farms.

Bitcoin mining farms are the massive structures, in digital terms, that keep the whole thing up and running. They keep the network secure and safe from external threats such as hacking. Some of these farms, like the one in China, for example, make up to $2 million a month.

And this is just for one such farm. China alone has 4 of them. These 4 farms add to a total of 3% of the entire network. The individuals behind the bitcoin mining farm are the ones who without which you would not be able to buy or sell any bitcoins whatsoever.

You might not have known that the bitcoin mining farm workers actually live inside the structure. They only spend 4-5 days a month outside of the bitcoin mining farm.

The conditions inside the bitcoin mining farm are less than ideal, as temperatures can easily reach up to 45-50 degrees Celsius. A certain, distant buzz is always present from the many custom made computers that work there. These computers are specially built for bitcoin mining.

One such site in China has 3000 of them. In 2014, Bitcoin mining had finally gained some world recognition. Including from giant firms like Microsoft and Dell.

As this happened, bitcoin mining farms got their fair share of attention too. A year later, in 2015, the first licensed exchange was opened in the United States, a huge step forward for this new online currency.

Nowadays, there are countless sites that accept this cryptocurrency. Without a bitcoin mining farm, no one would have been able to confirm the transactions mentioned above. Hence, bitcoin mining would have become useless and unusable.

Bitcoin mining farms are growing with hefty speed around the globe, so is the amount of custom made technology to support it. One such bitcoin mining farm employee has estimated that by 2020, there will be at least 5-10 bitcoin mining farms per country and that the currency will be used by every 10th person.

[bitcoinminer-blog]

Pre-orders for CoinTerra's 16nm AIRE Miner prompts controvery

Digital rendering of the still-on-the-drawing-board CoinTerra AIRE Miner.

Bitcoin-mining hardware maker CoinTerra announced today that it was accepting pre-orders for their newest creation, the 16nm AIRE Miner. On paper, it looks like a promising entry in the mining wars: 4.5 TH/s at 1350 watts at the wall, or around 0.28 watts per gigahash. If true, that level of efficiency doesn't sound like bad deal for a pre-order price of $2,500.

Shortly after the announcement, however, skeptics began pointing out some troubling elements of the CoinTerra's announcement. The most striking concern is that CoinTerra told CoinDesk that their new SHIVA ASIC "delivers a five-fold increase in performance-per-watt," something that sounds like a true breakthrough. Unfortunately, it also sounds a little too good to be true.

In fact, the SHIVA ASICs that CoinTerra claims will power this device have yet to actually be produced. CoinDesk's coverage noted that chips haven't even been taped out, making it unclear exactly how far along in the process the ASICs actually are. Even CoinTerra's own product listing for the pre-order notes that the TH/s rating is based purely "on simulations."

Ask anyone burned by last year's ASIC delays, and they'll tell you this has the makings of a very big problem.

Even a minor loss in efficiency could put the AIRE into "ho-hum" mining rig territory, particularly when the AIRE is planned for a Q1 2015 release. This puts CoinTerra in a race against 14nm Intel chips slated for release later this year, and a Samsung/GlobalFoundries 14nm chip to be released at the start of 2015. Neither of those chips are claiming a five-fold increase in hashing power per watt, so either CoinTerra is onto something incredible, or something is wrong with their simulations.

Equally troubling, however, are CoinTerra's Terms and Conditions for the sale, which ominously states:

ALL PURCHASES ARE FINAL, NON-CANCELABLE AND NON-REFUNDABLE. NO CANCELLATION OR RESCHEDULING OF ORDERS BY YOU WILL BE ACCEPTED.

While almost certainly not legally binding or enforceable, the tone of the T&C is decidedly hostile, going so far as to demand buyers to surrender their right to sue the company should the deal go belly-up. For a product that doesn't exist, with no clear shipping date and a $2,500 price tag, that's a bitter pill to swallow when the alternative is to buy bitcoin.

[bitcoinminer-blog]

Bitmain announces Antminer S4

Antminer S4 promotional image.

Mining hardware maker Bitmain released a teaser image today (and very little else) for their upcoming Antminer S4 unit. According to Bitmain's website, the unit will run at 2 TH/s and the first batch ship at the end of September. Beyond that, everything else about the unit is a mystery, including the price.

Given Bitmain's somewhat embarrassing last-minute revisions to the S3's hashing power estimates it's not entirely surprising that they've decided to keep the details of the S4 under wraps until the launch. The S3 is a 441 GH/s device retailing at 0.64 BTC, meaning the price would need to be no more than 2 or 3 BTC per unit to be competitive with their own products or to just buy bitcoin.

The unit appears to use the same housing and form factor as the controversial S2, and a stark departure from the double-vented shoebox design of the S3. As such, it's possible that the S4 is simply a revision of the S2's build with an improved version of the S3's ASIC blades. In that case, the S4 might be more accurately called the "S3.5."

It is possible that Bitmain has an ace up their sleeve with the S4, however. ASIC improvements have been huge in the last year, and the near-stealth launch could prove to be a canny marketing strategy. Then again, releasing a new line so soon after the lackluster launch of the S3 could indicate nothing more than Bitmain having a lot of S3 ASIC blades and S2 form factors to clear out of their warehouse. Only time will tell.

[bitcoinminer-blog]

Bucking the cloud-mining trend, Spondoolies-Tech announces new 1.7 TH/s home miner

SP20-Jackson promo image.

"As I’m sure you know, a lot of people have declared home mining to be a thing of the past," Spondoolies-Tech VP of Marketing Gadi Glikberg recently told CryptoCoinsNews. "That however is only true if home miners do not have access to the most efficient ASIC in the market."

Glikberg's pointed comment comes as the Israeli company prepares to launch its latest consumer-level miner, the SP20-Jackson. Though not exactly on the bleeding edge of mining hardware specs, the 1.7 TH/s, 8-chip ASIC machine pulls a reasonable 1100 watts at the wall, and is overclockable to 1.8 TH/s.

With a $1,190 price tag, it's not the best deal on the market, but it is priced within the range of a hobbyist. According to Glikberg, that's the point. He told CCN that the SP20-Jackson was intended to "spread the hash rate" and put "power back in the hands of home miners."

The hardware itself seems to still be in development, however. The company is currently taking pre-orders, with an expected ship date sometime in October.

Even if the Spondoolies-Tech hardware isn't exceptional, there's something to be said for a mining hardware maker giving priority to the home-mining market. With bitcoin mining becoming an increasingly industrial-scale, venture-capital driven business, many small miners are likely to be squeezed out or have to rely on bitcoin cloud mining. With centralization an increasingly worrying problem, the existence of a robust home-mining community is more important than ever.

[bitcoinminer-blog]

KnCMiner to cease mining hardware sales to customers in favor of hosted, cloud-based model

KnCMiner's "Arctic Cloud" facility in Sweden.

According to the Wall Street Journal, KnCMiner is out of the home cryptocurrency mining market. The mining hardware maker behind the Saturn, Jupiter and Titan lines told the news outlet that even with $70 million in first-year sales, direct sales to customers was rapidly becoming a losing game. The company plans to reposition itself as a cloud-based mining operation and chip designer, relying heavily on the $14 million cash injection it received from Creandum to launch a new dedicated hashing center.

That new facility, Clear Sky Farm, is located in northern Sweden, a region with plenty of cheap electricity and even more cheap cooling. KnCMiner currently controls about 7 PH/s, largely built from unsold Neptune units. With even the best of the KnCMiner line now looking like an increasingly bad investment from an ROI perspective, and with a particularly painful series of delays making even pre-ordered equipment a loss of customers, the company has decided to close the door or direct-to-customer sales.

“We don’t like people sitting in these queues for five months. It’s terrible. We generate a lot of stress for people,” KnCMiner CEO Sam Cole told the WSJ. Cole also noted that hundreds of customers had opted to simply have their money refunded rather than take possession of the mining equipment. That unclaimed mining hardware may already be in use at Clear Sky Farm.

Cole also declined to say if cloud-based mining contracts were actually profitable for customers.“We don’t give indications of returns," Cole told the WSJ. "That would be bad for business. We are not a financial adviser. We cannot guarantee the performance they will get. The customer will have to do this."

[bitcoinminer-blog]

60,000 sq ft Michigan warehouse to become home to co-op hashing center

The HRP hashing center, ready to host miners.

If all goes according to plan, a giant warehouse in Michigan may soon become one of the largest bitcoin hashing centers in the U.S. Mining startup Hash Rack Power (HRP) announced yesterday that it will be converting the 60,000 sq ft space (location undisclosed, but likely in the outskirts of Detroit) to a "co-op style hosting center" for bitcoin miners. The location is already equipped to handle 2.7 megawatts of power, and the group claims that this could easily be increased to 8.7 MW should the need arise.

For those willing to take the plunge, the space does seemingly offer some interesting amenities:

Service elements will be in place, such as high security, monitoring, carrier grande Internet, climate control, live remote hands by experienced IT personnel 7/24 service and the whole 60,000 of space covered with high powered industrial air conditioning and air balancing equipment power that will be ducted to the mining equipment.

Those services are nice, but the project will live or die by the price of electricity. Michigan has a huge power infrastructure from the state's days as an industrial center, and at the moment power is relatively inexpensive there. HRP is currently pricing power for co-op members at $60 for 500kW per month, but said in the press release that lower rates could be negotiated if participation was high enough.

Early members of the co-op will receive shares in the company, allowing the organization to eventually transition to a for-profit model once the infrastructure is in place. Should the location prove profitable, HRP noted that the property has significant acreage for future growth, and that similar warehouse spaces are readily available in the area.

[bitcoinminer-blog]

KnCMiner and Bitmain announce new cloud-mining services

Mining hardware makers KnCMiner and Bitmain formally announced plans this week to launch new cloud-based Bitcoin mining services. Both announcements were widely anticipated, with both manufacturers lagging a few months behind their competition in offering the contract-based service. Neither service is yet live, with only pre-order subscriptions currently available.

The KnCMiner facility, dubbed Clear Sky Farm, is billed as a 7 PH/s hashing center in northern Sweden. The system is built from "excess" Neptune "Hash While You Wait" units that had been previously put to use to offset customer losses due to shipping delays of their 20nm line.

In an interview about the launch with CoinDesk, KnCMiner's marketing director Nanok Bie said:

“We’re launching cloud services because of shifts in the market and demand from would-be customers. Home mining is becoming more and more difficult because of energy costs etc. Having your mining in the cloud has obvious advantages  – we can source green electricity cheaper for instance, and have other bulk advantages.”

Instead of building up a new hashing center, Bitmain simply decided to buy an existing one. The "Antminer" maker purchased Hashnest.com, and will be independently developing a new cloud-mining platform. Of particular interest is Bitmain's annoucement that the new ANTPOOL platform will be fully integrated with 51% attack resistant pool system P2Pool.

We are investing significant resources into the development of p2pool mining protocol. ... The development of contributed into p2pool is almost completed, and in the final testing and deploying. ... We have a focused team who are developing the p2pool mining protocol, and the goal is to have 80% of the total network hash rate join p2pool within next 12 months. At that time, the whole Bitcoin community will never be anxious about the potential risks of the decentralization risk associated with the pool mining model now.

Bitmain noted that the first contributor to the ANTPOOL system will be adding around 4 PH/s to the P2Pool network.

[bitcoinminer-blog]

The Coinsman visits another Chinese bitcoin mega-mine

One of many revealing images from the Coinsman's blog post. Source: http://www.thecoinsman.com/2014/08/bitcoin/inside-one-worlds-largest-bitcoin-mines/

Earlier this month, bitcoin blog The Coinsman reported on the internal workings of a massive hashing center in Northeastern China, revealing key details on the operations of the mining operation. This week, the Coinsman visited another Chinese hashing center, this one being a "larger, even more secretive operation" than the last.

Bitcoin mining is clearly a booming enterprise across the globe, but this massive, four-building facility is something new. As the Coinsman noted: "This wasn’t a repurposed factory like the previous mine I visited… this was an entire facility being constructed just for bitcoin mining!"

According to the report, each warehouse-like space has around 3,000 square meters of floor space (9842.52 square feet). All told, the site will eventually have eight such buildings, all dedicated to creating a true behemoth of industrial bitcoin mining power.

How soon with it be complete? The answer is staggering, both from a logistical and safety perspecitve:

The mine operators told me that each warehouse took fifteen days to construct, and an additional ten days to fill up with hardware and get it all hashing away. The concrete was still drying on some of the buildings.

The buildings are clearly designed for bitcoin mining and little else, with a wall of industrial fans on one side and the opposite wall covered in what appears to be a cardboard-based evaporative cooling system. Not only is the system inexpensive, it's also seemingly effective, keeping the internal temperatures of the hashing centers at 77 °F.

And inside? Racks and shelves filled with brand-new mining hardware. It seems that the center is equipped for both bitcoin and alt-coin mining, and has new equipment from a variety of ASIC vendors arriving constantly. The Coinsman estimates that the center may already have several petahashes of mining power under its command, and may already account for as much as 5% of the entire bitcoin network.

If you've been wondering why the bitcoin difficulty rate has been spiking of recent, look no further than China's digital gold rush.

[bitcoinminer-blog]

With cheap electricity and free cooling, has digitalBTC's Iceland hashing center cracked the profitability puzzle?

Iceland's Jökulsárlón, a glacial lake. Image source: https://www.flickr.com/photos/krmuir/142110701/

Bitcoin industry blog CoinDesk published a profile of Australian bitcoin-mining company DigitalBTC this week, revealing the company's fiendishly cost-effective vision for the future of industrial-scale hashing centers. At the core of their plan: Low-cost renewable power, and a naturally cold climate.

The company is building its new hashing center at the Verne Global data center in Iceland. Powered entirely by geothermal and hydroelectric sources, the data center can take advantage of Iceland's famously inexpensive electricity costs (roughly $0.10 per kWh). Given that Australian electricity can be hugely expensive (around $0.31 kW/h in 2012), those savings alone could be enough to justify relocating a mining operation.

DigitalBTC told CoinDesk that it expects to see an energy savings of around 40% following the center's launch, with additional savings coming from cooling. Although relatively mild by comparison to deceptively named neighboring island Greenland, Iceland's temperature is still exceptionally cool, ranging from an average of 55 °F in the summer to a bone-chilling 14 °F  in winter. For an industry that is increasingly reliant on effective cooling technology to keep warehouses of ASIC hardware operating efficiently, Iceland seems like a veritable mining Shangri-La.

Ironically, due to the country's capital control laws and the policies of the Icelandic Central Bank, bitcoin and other cryptocurrencies are unambiguously illegal for transactions within Iceland. Iceland's government, the Althing, has been harshly opposed to cryptocurrency adoption, most notably during the failed launch of the Auroracoin alt-coin earlier this year. With an increasing number of industrial-scale mining operations looking for low-cost options, and Iceland increasingly looking for outside investments, that attitude may be about to thaw.