What is Bitcoin Mining? September 2013

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3 Δεκ 2013 (πριν από 3 χρόνια και 7 μήνες)

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What is Bitcoin Mining?

September 2013




Bitcoin (BTC) mining creates blocks of digitally
-
signed BTC
transactions (currently about 300 transactions per block)



In a transaction, each owner transfers Bitcoins to the next
owner by digitally signing them over.



A payee, or recipient, can then verify each previous
transaction by verifying the chain of ownership.



The Bitcoin Network

timestamps transactions by includin
g
them in blocks that form an ongoing chain called the
“blockchain”.



Such blocks cannot be changed without redoing the work that
was required to create each block. This becomes
computationally impossible after a number of confirmations.



As long as
miners
not cooperating to attack the Bitcoin
Network control a majority of computing power
, they will
generate the longest chain of records and outpace any
attacks.



Security is thus built into the system by requiring less
computational power t
o mine BTC than to
hack the Bitcoin
Network
.



Currently, 25 BTC are generated with each block that is
created, which occurs every 10 minutes on average.



This amount is called the “block reward” of the miner.



What is Hashing?




The process to confirm or validate transactions

that will form
the next block is called “Hashing.”



As the history of transactions (blockchain) grows so does the
computational power required to verify these transactions.


Number of Bitcoin

Transactions per Block


 

Bitcoin Hash Rate

Difficulty

 
 


I
n
the earlier stages of the Bitcoin Network

you could mine
BTC with a simple GPU that would produce 350 Mega
(million) Hashes per second (H/s).



In recent months FPGA machines are also turning
unproductive, limited by chips of 1 Giga (billion) H/s.



The
Bitcoin Network

is now using mostly ASIC (application
specific integrated circuits) 65nm semiconductor chips
capable of hashing at about 4 Giga Hashes (4,000MH) per
second.



Next generation ASIC 28nm chips are now coming out with a
hashing power of 400 Giga

Hashes per second.

 
 
 
Bitcoin


Current Market Trends


 
 



However, the

next generation 20nm semiconductor step
seems to be further away, perhaps slowing future growth.

 
 
—
The BTCN has been growing
fast just reaching the 1Peta
-
Hash size
(1PH = 1,000TH =
1,000,000 GH)
.


—
New 28nm generation
miners will continue to
propel growth over the next
12 months.

 
 
 


Returns on any BTC mining operation then needs to be
measured in BTC terms and US$ terms




In Sep’13,
approximately
130,000 BTC were mined. So if you
had h
ashing power of 1TH and the Bitcoin Network

was at
1
,
200TH, you would have mined
0
.83% of
the all coins, or
1,083 in that month… at a price of $140 per BTC would
equate to $151,667 in one month!



To learn
how to benefit from

a HashTrade Contract
click here


 
—
The price of BTC has been
growing as well, reaching
levels of US$140 (Sep’13)


—
If current trends continue
the price of BTC could well
exceed US$200 in 12

months