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Thursday, September 28, 2017

Complete Explanation of Bitcoin Mining Hardware

In the previous article I have explained briefly what is bitcoin mining hardware. This time I will explain in detail hardware advantages mined bitcoin. Let's look at some kind of mining device that can be used to mine Bitcoin.

Mining Bitcoin With CPU

The first time Bitcoin starts running, the device used can only be done by using the CPU on a regular computer. Of course, it's because the level of difficulty at that moment is still low is not it. So mining using this CPU is considered to be the first generation of Bitcoin mining devices.

At that time, it could be said that the miners were only looking for more linear nonce with SHA-256. And check next, if it has produced a valid block.

The question is, how fast if Bitcoin mining is done with CPU? If the computer used is a high end computer in the present time it is likely to be approximately 20-25 million hashes per second, in units of MH / s. And when compared to the current level of difficulty, it may take several thousand years to find a valid block. So mining with this CPU really has become quite difficult.

Mining using the CPU, is no longer profitable in the present. For people who have done mining using a CPU, it certainly will feel disappointed, because they also do not know exactly how to work Bitcoin.

Mining Bitcoin With GPU

The next second generation, the miners began to use the GPU. A graphics card is almost used in all types of computers today. This GPU can generate high parallelism, and can be quite useful in terms of Bitcoin mining.

Bitcoin mining can be paralleled, so miners can also try to have hashing at the same time with different nonce. When OpenCL began to be released in 2010, it was possible to run many different types of calculations faster on a graphics card. It is also the case that in the end it opens the opportunity to do Bitcoin mining through GPU.

A graphics card has properties that can be considered quite attractive. Easy to use, even amateur people will be easy to make initial settings of this graphics card. Buying a graphics card is also quite easy to find in the market. And one major benefit is, graphics card is also good for Bitcoin mining.

Why is it good? Because the graphics card can work in parallel, which can be used as a simultaneous calculation in SHA-256. In fact, some types of GPUs also have specific instructions for being able to perform quite useful operations on SHA-256. And one more interesting, because most graphics cards can be overclocked, though also quite risky if too forced. Errors can occur when performing SHA-256 calculations using this overclocked.

Mining with this GPU can be modified in such a way. So the miners can make and design some GPUs in one motherboard. In fact, many miners also make similar designs, using many GPUs that are combined in a set of motherboards. So the whole GPU can also be used together in mining Bitcoin.

One example of this GPU assembly can be read here: Create Your Own GPU Mining Rig

GPU there are advantages, of course there are also shortcomings. GPU requires great power. So that electricity consumption also become big. In addition, the cost to assemble the GPU is also quite expensive, especially if you intend to use a lot of graphics cards. And many coolers are not described good specifications to support the performance of this GPU.

Mining With FPGA

FPGA stands for Field Programmable Gate Array. FPGA is a digital IC that is widely used to implement digital circuits. The Bitcoin miners started switching a lot using FPGA, when the GPU started to be abandoned a lot.

At that time, many were using Verilog, hardware that was designed using FPGA. Basically FPGAs appear in Bitcoin mining just as many early miners switched from CPU to GPU. It aims to be able to do Bitcoin mining as much as possible.

On this FPGA chip, it allows its users to customize and reset its configuration. Basically FPGA can offer better performance than graphics card. Especially with the discretion to configure the settings. In addition there is also a cooling FPGA that can facilitate the process works.

With this FPGA, miners can also assemble the device with a cleaner and tidier when compared with the GPU. The use of FPGA allows it to reach up to GH / s, or approximately one billion hashes per second. However, if the miners have hundreds of boards each 1GH / s at this time, it may take an average of 50 years to find a new Bitcoin block.

Therefore, many consider the use of FPGA is still less effective. Because the increase was felt only slightly when compared with the GPU. In addition there are some disadvantages also in FPGA. The disadvantage is that many have been damaged when used for Bitcoin mining. FPGA in Bitcoin mining did not last long. Just a few months. Much longer on the GPU which at that time can reach up to 1 year. A few months after many are using FPGA, then ASIC appears.

Mining Bitcoin With ASIC

At present, mining has been dominated by ASIC. ASIC is a special chip to do certain work. ASIC or stands for Application-Specific Integrated Circuit is specifically designed to be able to do Bitcoin mining.

There are many great vendors that sell to consumers with different types and types. Of the many different types, there are various levels of computation, and the amount of power consumed. So that miners can have each type of Asic.

Asic design process requires expertise and product excellence that can last long. Even so, Asic for mining Bitcoin is indeed designed and created quickly. Some analysts say that asic vendors even produce the fastest ASIC in the history of integrated circuits. Especially on handling the problem when the product is in the hands of consumers.

Most of the Asic products in the first generation, there are many bugs and most also do not provide the proper numbers and performance. But then Asic has become the most reliable in the present.

Until 2014, the Asic term is short enough because it has increased quite rapidly which increases the hash rate of the Bitcoin network. Asic growth period in the first era lasted in six months. During this time, most of the profits that have been made exist in the first period. A miner's fraction can make up half of the expected profit on the life span of Asic within the first six weeks of its use.

So in this case, the speed of product delivery from vendor to consumer hand becomes an important factor to generate profit in mining. Despite the immaturity in Asic's production process, customers often experience bottlenecks in late delivery of products. So often come late and almost obsolete when Asic products are received in the hands of consumers. Meanwhile, the growth rate of Bitcoin hash has been stabis. But in the early era will seem many customers who feel frustrated and many who assume has been deceived by the vendor.

In the history of mining Bitcoin, the economy in its mining is still not profitable for small miners to be able to do mining. Especially to be able to buy mining equipment and start profiting from it.

In fact, many people who have made the purchase order of this mining device will lose money, if based on the calculations they make when deciding on the purchase order. In addition, Bitcoin mining also seems to be a gamble related whether the price of Bitcoin will rise or not. For many miners, although they can make a lot of profit from mining Bitcoin, it would be better if they had just taken advantage of it to immediately purchase mining equipment, then invest in Bitcoin, then sell it for profit.

Although the miners can immediately order the mining device, but it is not too good if they do not know in detail about Bitcoin and cryptocurrency. Currently, most Asic products have been sold commercially. It is almost impossible for these products to be purchased from mining products, because there will definitely be electricity costs as well as power requirements for cooling.

Bitcoin Mining Large And Professional

It can be said that currently Bitcoin mining has moved from individual mining into a large and professional mining center. These large Bitcoin mining companies mostly operate not openly, to protect them and maintain them competitively.

There are three things that become factors for setting up a Bitcoin mining center. Three important things are climate, electricity cost, and network speed. So in particular, it would be better if the mine was done in a climate that digin in order to reduce the cost of electricity consumption for cooling.

The problem of cooling system is certainly a challenge in Bitcoin mining. Meanwhile, of course many who hope that the cost of electricity is cheap. And also a fast network connection to connect to other nodes in the Bitcoin network faster too.

The Evolution of Bitcoin Mining

In the mining of Bitcoin there has been a slow evolution. Starting from mining with CPU, switching to GPU, then to FPGA, and until now has been dominated by ASIC. While this is the same happened evolution in gold mining.

In the evolution of gold mining, begins with mining individuals who use pots to gain gold. Switch then using boxes that use the floodgates, and proceed by using explosives on the hillsides by groups of gold miners. Until then began the occurrence of modern gold mining that does a giant mining and has made a big hole in the earth.

Based on these two mining evolutions, there is a decline in individual roles that are equally declining over time. Turning to the dominance of large companies to make a bigger profit. However, there is another pattern that shows most of the benefits gained from the sellers of mining equipment.

What will happen to Bitcoin mining in the future? Currently Asic mining has become the only realistic way to be able to do mining and gain profit. However, mining with Asic has also been unfriendly, especially to small miners.

If there is a question that questions, then what is the point of decentralization if in the end every individual is finally eliminated? Would it be possible to return to a one that might combine the two? Is it true that the birth of the Asic mining and the emergence of these large mining centers have broken the original vision of Bitcoin?

In cryptocurrency, there may be a cycle that may recur. And it can be seen the tendency with the appearance of Altcoin. Where a cryptocurrency other than Bitcoin appears and is still free from big investors. But of course with the start and price levels are still much smaller compared with the current Bitcoin.

There is a condition that can be utilized when Asic is still not available on the new Altcoin. And mining will probably continue the history of the CPU to the GPU, then from GPU to FPGA, and back to the Asic mining. But it certainly will also be risky, about whether the new altcoin will be successful or not later.

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