What Are Bitcoin Miners Doing

An Overview Of What Bitcoin Miners Are Actually Doing

This article, to a degree, builds upon my previous one.

Before we peer under the hood, let’s look quickly at how miners have evolved.

At first, the mining difficulty level was extremely low (we’ll look at what that actually means shortly). In the early days of Bitcoin, bitcoin could be profitably mined on a simple personal computer’s central processing unit (CPU). In less than two years, people began mining on graphics cards (GPU) because they were, with the addition of some software, better suited due to higher clock speeds. That is to say, they were able to perform more calculations per second via parallel processing. Like CPUs, those were only profitable for a few years. In 2012, the first ASIC miner (Application Specific Integrated Circuit) came to market.

Miner performance is measured in hashes per second, or H/s. This is due to what they’re literally doing – brute forcing millions of hash function inputs in the search for the proper output. At the time of writing, the fastest miners on the market are rated in excess of 100 TH/s, or 100 million million hash attempts (tera hashes) per second.

ASICs are so fast because they are purpose-built. They are created to solve a single cryptographic hash function, which, in Bitcoin’s case, is SHA256. Theoretically, a bitcoin miner can mine any other cryptocurrency that also uses SHA256, but it would probably not be profitable due to a miner’s high power consumption. This large power requirement is what incentivizes miner operators to seek out the world’s cheapest power, which is frequently renewables or otherwise stranded energy.

Source link Bitcoin Magazine

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