Bitcoin Mining and How it Started

How It All Got Started

Cpu Mining

Bitcoin mining started with earlier servers that let users utilize personal CPUs for mining. The first block header hash (a secure linkage between previous and current block) was computed using a conventional CPU of a computer, the Intel Core i7 990x to be precise, which was efficient enough to calculate at 33 MH/s.

Gpu Mining And The Starting Of Mining Farms

As time went by, the cryptographic mining industry upgraded its processing system to graphics processing units (GPUs). These adapters were able to perform cryptographic computations at a much faster rate than CPUs. The higher models of GPUs were able to calculate at 675 MH/s. Moreover, it was deduced that the calculative abilities could be even faster if one combined the power of more than one GPU. This linking of GPUs to mine cryptocurrency is termed as a Mini Farm, which contained a RAM unit, a CPU, 5-6 potent GPU accelerators, and a motherboard.

Gate Arrays

No doubt the disadvantage in initial mining was the requirement of a very powerful system. To tackle this weak link in the mining farms, a technology called Field-programmable gate array, or FPGA, was introduced. An FPGA is an IC (integrated circuit) that is configurable by the designer or customer once it is manufactured.

FPGA miners were evaluated to be five times more efficient compared to GPU miners. Regarding hash period, an FPGA computation displayed efficiency levels of 25.2 GH/s.

However, there was still the overwhelming costs incurred while using FPGA mining processes. GPU units were still less expensive and had a better resale value once exhausted.

ASIC Mining

After the advent of the mining farms, it was found that the previous methods became economically impractical, as they were not specifically designed to run mining computations. This is where application-specific circuit miners or ASIC miners came into existence, which only served the purpose of cryptographic mining. These miners are almost ten times more efficient in mining.

One of the leading designers of ASIC miners was Butterfly Labs, which started developing miners in 2012 on pre-orders for potential customers. One of their masterpieces is the SC Mini Rig, which has the computation energy of 1,500 GH/s.

As mining became more and more difficult, it was almost impossible to manage computations using mini-farms. Lack of resources ultimately led to the migration of the mining technology to data centers, which were highly efficient in their calculative power. True Bitcoin mining farms are justified using such setups with massive data centers to support the activity.

Cloud Mining

While ASIC mining using data centers is running currently, there is a new method of mining, thanks to the emergence of cloud computing technology. We call it cloud mining, which implements cloud-driven services for mining cryptocurrency. The cloud was able to save costs on expensive tools and equipment, and electricity, so the technology was favorably included in the mining process. This solved many problems that data centers usually involve, yet it is not 100% financially efficient. Almost 80% of cloud mining services present today are frauds, and many mining services do not pay the revenue after investment. So, this type of mining service needs to be approached very cautiously.

Hack Mining

Another emerging mining concept is hack mining. This is carried out using smart devices owned by other users. This mining activity is carried out using a special malware software which hacks into a device without the user being aware of it. After penetrating the device, they discreetly mine using the hacked system. Many users purchase such shady services, which do not cost much.

As a lot of power is needed to mine a cryptocurrency coin, a hacker hacks multiple smart devices, and combines the power of the activity. This way, the owner of the smart device does not even notice any changes. A case in 2014 emerged, where an anonymous attacker exploited a limitation in the cloud servers of Synology to mine around $200,000 worth of Dogecoins. More cases emerged, targeting mobile devices in their millions to mine cryptocurrency since the existence of this concept.

Hack mining activities are usually successful as hackers can read the software codes better than the security teams of the manufacturers. They tend to locate the vulnerabilities in their systems and exploit them for their advantages. Therefore, beware, as you may never know that your computer system is also helping a miner get rich.


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