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Everything you need to know about Bitcoin mining
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I don't think you can make a living off mining and as more people use it... you earn less I also don't understand the gpu overprice thing. 1080ti didnt not add huge overpricing when looking at pcpartpicker
The way I understand bitcoin miners is that essentially process bitcoin transactions and add it to the public ledger and in return get compensated for it in the form of new bitcoin issued. But what happens when all the bitcoins has been mined? What incentive is there for miners to continue to mine?
As I read up more and more on btc, I get interested in the mining aspect of it. I was wondering if using gpus to mine still work in a profitable way, also could anyone link an up to date btc mining guides for beginners?
I am interested in Bitcoin mining and am really curious about the algorithms that are used for this purpose. I "googled" a bit and realised that you can perform mining either in a pool (collaborative) or as an individually; and to perform this you can use the programs that already exists (or ever ASICs which will soon hit the market). But I have hard time finding "the" algorithm and what is this difficult "math problem/puzzle" to be solved. i.e., if I need to implement this algorithm on a custom hardware where do I find the required documentation!
What is really happening in the bitcoin mining process?
April 30, 2020 | There’s more than just the sound of thousands of vacuums It is very easy to just silo the arcane bitcoin mining process as just a bunch of machines computing mathematical algorithms. Although for the most part this is true, and the veracity of this is not far off from the real truth, but what we see on the surface is not identical to what we see below the surface. Understanding bitcoin mining goes beyond the USB enabled ASIC miners we are accustomed to see on every thumbnail article we come across related to this industry. It’s easy to understand why newbies halt their understanding of bitcoin mining to just state-of-the-art supercomputers with cool flickering neon green lights. The following below is taken from the masterpiece of a novel, “Mastering Bitcoin”, by the great Andreas Antonopolous. As elegant as it sounds, its best to restate Andreas’ explanation of emergent consensus. “Satoshi Nakamoto’s main invention is the decentralized mechanism for emergent consensus. Emergent, because consensus is not achieved explicitly — there is no election or fixed moment when consensus occurs. Instead, consensus is an emergent artifact of the asynchronous interaction of thousands of independent nodes, all following simple rules. All the properties of bitcoin, including currency, transactions, payments, and the security model that does not depend on central authority or trust, derive from this invention. Bitcoin’s decentralized consensus emerges from the interplay of four processes that occur independently on nodes across the network:
Independent verification of each transaction, by every full node, based on a comprehensive list of criteria
Independent aggregation of those transactions into new blocks by mining nodes, coupled with demonstrated computation through a proof-of-work algorithm
Independent verification of the new blocks by every node and assembly into a chain
Independent selection, by every node, of the chain with the most cumulative computation demonstrated through proof of work”
The following is a scenario taken from the book as well which excellently demonstrates what is going on with a mining node and its corresponding connected miner machine: “A mining node is listening for transactions, trying to mine a new block and also listening for blocks discovered by other nodes. The arrival of this block signifies the end of the competition for block 277,315 and the beginning of the competition to create block 277,316. During the previous 10 minutes, while Jing’s node was searching for a solution to block 277,315, it was also collecting transactions in preparation for the next block. By now it has collected a few hundred transactions in the memory pool. Upon receiving block 277,315 and validating it, Jing’s node will also check all the transactions in the memory pool and remove any that were included in block 277,315. Whatever transactions remain in the memory pool are unconfirmed and are waiting to be recorded in a new block. Jing’s node immediately constructs a new empty block, a candidate for block 277,316. This block is called a candidate block because it is not yet a valid block, as it does not contain a valid proof of work. The block becomes valid only if the miner succeeds in finding a solution to the proof-of-work algorithm. These specialized machines are connected to his mining node over USB. Next, the mining node running on Jing’s desktop transmits the block header to his mining hardware, which starts testing trillions of nonces per second.” That is essentially the process of what a miner machine and a mining node is going through each every second it is hooked up to the network. Of course this is just a high level overview with a bland taste but one could go more in depth by reading the book mentioned. Source: 1.Mastering Bitcoin: Unlocking Digital Cryptocurrencies 1st Edition, by Andreas M. Antonopoulos, O’Reilly Media; 1 edition (December 20, 2014)
Enjoy =) Larry Page = $41 billion Bill Gates = $86 billion All Cryptocurrency's = $200 billion Amazon = $402 billion Apple = $730 billion USD in circulation = $1,500 billion Gold Market Cap = $8,200 billion Physical Money (notes/coins) = $31,200 billion Stock Markets = $66,800 billion All U.S. Money (bank deposits/loans) = $83,000 billion
This doesn't include ALL future's exchanges (such as CME Group), ALL options exchanges, ALL stock exchanges, ALL forex exchanges.
This doesn't include ALL celebrities, ALL inventors (such as Elon Musk, and so on), ALL corporations/companies.
This doesn't include ALL and each and every single country that ALSO has examples of all of the above.
This doesn't include Visa/Mastercard/Discovery/AmericanExpress transactions.
But why doesn't EVERYBODY just convert ALL of the world's money of the ENTIRE PLANET to paying each other in gold? Gold is a great 'store of value', isn't it? Yes, it sure has value, but because it is inconvenient, hard to transport, slow, not divisible (without a third party), and difficult to keep from being robbed (without a third party), that is why the entire planet does not transact in gold, and hence why Gold's market capitalization is only $8,200 billion.
So, how do we fix this? How can we get more people to transact in gold? How can we convince people to say "Fuck transacting in everything other than gold"?
The only way this is possible, is if gold was more convenient to transact with than everything else, especially VISA. Which is impossible. You can't pay for a $100.37 item on Amazon.com, through the internet, without a third party, in a split second, by using gold.
Then, what SHOULD we use? Well.. VISA can do 80,000 transactions per second peak velocity.
Bitcoin (whitepaper version), can do 1,000,000 transactions per second CHEAPER than VISA. (It can probably do even more in the future), it's also at the same time a tangible currency (that takes trillions of video cards to create one single uncounterfeitable coin) aka "store of value".
And what does 1,000,000 transactions per second mean? It means that ALL of the world (as described above) EASILY has room to enter the system. And not only is it a payment system, it is a currency ("store of value"). You literally HAVE tangible coins. Not merely a payment system like Paypal, or VISA, but a 2-in-1. It is a CURRENCY that is also in itself a PAYMENT SYSTEM that doesn't require a third party.
So, for example's sake, let's add up all of the money (listed above), and "flood" the entire planet into using a currency ("store of value"), that is ALSO a payment system in itself BY DESIGN, able to send money to the other side of the planet, instantly, without needing to use ANY kind of outside third party, because the coin ITSELF is the third party IF it is the Whitepaper Version of Bitcoin. But if the witness data (aka transaction signatures) are segregated from the chain, then the coin (economy itself) is no longer ITS' OWN "third party" anymore, but prone to whoever wants to take advantage of the segregated witness data (whether its blockstream, bitcoin core, AXA, miners, or banks, doesn't matter). Because when the chain of digital signatures is no longer part of the blockchain, the incentive to take advantage of the system and introduce a traditional (bankegovernment) "third party" is now profitable/possible to do so. Whereas, originally, without SegWit, anybody who tried to do this would infinitely lose money in trying to do so---aka mining coins was more profitable than trying to do a 51% attack. Hence, with SegWit, we introduce a loop-hole into Bitcoin, allowing double spending of anyone's transactions, reversing anyone's transactions, halting anyone's transactions, freezing anyone's transactions, charge-backs, etc.
Bitcoin (whitepaper version) = $10.7 Billion current total market capital.
Now introduce $191,659 billion (see above) of the world's money to a ONE WORLD CURRENCY, that DOES NOT REQUIRE A THIRD PARTY.
$191,659 billion / $10.7 billion = 17,912x
17,912 x $650 current value of Bitcoin (whitepaper version) = $11,642,800 , for one coin.
Therefore, no one (on a global scale) will use a currency (aka "store of value") where you have to pay $5-$1000 for each transaction... Walmart does not profit from selling chewing gum for $.99 cents and paying a $5 network fee (at minimum).
90% of people who buy Bitcoin don't even know what is "Segwit" or "Blockstream" or "Satoshi" or "Whitepaper". They think it's the 'norm' that it takes hours upon hours (or even days) to get their Bitcoin. They assume that because it's "hard to get", then that is why it is valuable. Upon all of the other reasons. It's all media. It is exactly what BitConnect is doing. The only reason people are buying it, is because everyone is gambling, but are fully convinced that it is "investing". This is why Bitcoin is not going to lose its' value instantly. Nor is it going to skyrocket to an astronomical value like $100,000 instantly. But it will most definitely NOT be used as replacement currency by Walmart, Amazon, Sams Club, Coca Cola, Target, etc, and so on, it goes on FOREVER. All of these companies use VISA.
And this is why Bitcoin (Whitepaper version) is literally full-stop replacing VISA over the next decade.
But what about other coins that already exist with little to no fees, instant transactions and end up having little to no traction and don't look like anyone cares about them??
There are huge reasons why they have little to no traction and look like no one cares about them.
Ethereum = does not have a fixed supply. It does not matter how fast transactions are if a coin's end-total-supply is inflationary. (Lipstick on a pig).
Ripple = 70% of the supply is held by a third-party. (Banker coin).
Litecoin = has a Script hashing algorithm, instead of SHA-256 hashing algorithm. (Coins have weaker security model--aka potential to be counterfeited several decades from now when we have stronger computers).
Dash = has master node system. The more DASH anyone has, the more master nodes they have. Over 70 percent of coins are located in just 2 percent of wallets, with 20 percent more in 1 percent of wallets. This actually means that just 3 percent of Dash owners control more than 90 percent of coins. This distribution is way to uniform and unnatural, and opens a highway for price manipulations.
NEO, NEM, QTUM, OmiseGo, IOTA = not mined coins. AKA no proof of work. Are ALL coins that were not made with any kind of "proof of work". They are literally made from nothing. (It takes TRILLIONS of video cards to make one single Bitcoin). These coins rely on security systems that do not solve the Byzantine Generals problem. (Aka, the "third party" for these coins is the creators---hence these coins have a flawed security model in who has say in what happens. Whereas, the "third party" for Bitcoin (whitepaper version) is the freemarket (the economy itself), the people who work and/or buy in to the system.). But all of these coins without proof of work rely on a closed-source system to prevent double spends. In other words, they are ALL more or less improved versions of Ripple.
Monero = severe scaling issues, the transactions are far bigger than what Moore's Law can keep up with. (Technology wouldn't be able to catch up with how much bandwidth/storage space is needed to run this network, regardless of how many years into the future we go).
These are the top ones I felt like choosing. I can explain every coin on the list. But the entire point, is that for EVERY one of these coins, Bitcoin Cash does it better. Bitcoin Cash has 0-conf (Bitcoin used to have it until the system could not accept anymore transactions and started backlogging transactions---aka full blocks). Bitcoin Cash has scripting functions (aka smart contracts). Bitcoin used to have it when the transaction fees only cost 1-5 cents per block... But no one wants to use the scripting functions anymore when you have to pay $5-$100 for each block.
Bitcoin (whitepaper version) does much more efficiently what EVERY other coin attempts to do. Whether it's security, transaction capacity, inflation control, storage, or the solving of the byzantine generals problem. Bitcoin (whitepaper version) does it flawlessly. Every other coin has flaws to some degree or another that only succeed in proving that Bitcoin (whitepaper version) is the most secure system possible.
There is a reason why Satoshi did not design Bitcoin (whitepaper version) like any of the other coins. It is because he already thought about those other designs.
Bitcoin may be the next big thing in finance, but it can be difficult for most people to understand how it works. There is a whole lot of maths and numbers involved, things which normally make a lot of people run in fear. What is Bitcoin mining? Well, it's one of the most complex parts of Bitcoin, but it is also the most critical to its success. Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. Understanding Bitcoin: Bitcoin is a new form of currency that seeks to change how online business is done. This instructable seeks to not only get you to understand what bitcoin is, but how you can get started mining your own bitcoins at home! Check out this quick video f… Bitcoin Basics: What Is Cryptocurrency Mining? When someone sends Bitcoin anywhere, we call that a “transaction.” Transactions made in-store or online are documented by banks, point-of-sale ... A Beginner’s Guide to Understanding Bitcoin. Don’t use or invest in bitcoin until you’ve read this first. A lot of guides have been written to describe the basics of bitcoin. They usually start with an analogy around gold and mining, and something called the blockchain. These guides are great, but they often get into the technical weeds ...
Bitcoin Basics (Part 1) - "Explained For Beginners" - YouTube
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