What Is Happening In The Industry?
Since its early days nine years ago, the mining sector has undergone massive alterations and technological advancements. But in which direction are current developments going?
For a better glimpse into what is ahead, we should first look at history. In the beginning, miners used PCs, namely central processor units (CPUs) to harvest Bitcoin. However, the hashrate of the network grew extensively. As a consequence, the amount of Bitcoins produced by CPU mining became less than the cost to operate. In 2009, the CPU option was removed from the core Bitcoin client’s user interface and replaced with GPUs (graphics processing units). If we think of CPUs as the brains of a computer, a GPU would be the soul. However, then came FPGA mining or Field Programmable Gate Array. Compared to CPUs and GPUs, this method consumed less power. Still, it provided for processing of relatively high hash ratings, making them more viable and efficient.
Introduction Of ASICs
In 2013 came the release of ASICs, or the application-specific integrated circuits. ASICs are microchips with a design specifically for Bitcoin mining that consume less power than GPUs. Furthermore, they perform the work equivalent to 12,000 CPUs. However, this doesn’t mean a miner should throw out his GPUs. GPU rigs are still in operation in plenty of alternative coins on the market. Today’s hardware specifically designed to process mining data is incredibly powerful, but it comes at a price. There are other options on which this article will expand.
How Does Mining Work?
For every kind of cryptocurrency, there is a different mining algorithm. At this instant, let’s stick with Bitcoin for this demonstration. With paper money, a government decides when to print and distribute money. In contrast, Bitcoin doesn’t have a central government. Instead, miners use special software to solve math problems in exchange for a fee. Mining serves two purposes. One is to confirm transactions in a trustful manner when assignment of computational power (effort) to the block is sufficient. Th other is to issue new Bitcoins in each block.
The process works like this: a miner receives a transaction and verifies it is valid. Several validated transactions from other miners are bundled into a block. Then insertion of the header of that block into a new block as a hash is the next step. A hash is a mathematical process that takes input data of any size. It then performs an operation to return an output data of fixed size.
Proof Of Work
“Proof of Work” is the operation of solving the mathematical problem. After solution of the problem, the new “fixed size” block constitutes a new link in the local blockchain and the entire network receives this information. Miners essentially keep the network secure by approving transactions while ensuring fairness, network stability, safety, and security.
Who Is In Mining?
Currently, there are two types of miners; those who invest in their own hardware and those who rent mining hardware through “cloud” companies. Although there are many detractors of cloud mining, a popular way to mine is by paying a service to do it for you. The next step is joining a mining pool, or groups of cooperating miners who agree to share block rewards in proportion to their contributed mining hash power. The process of mining for Bitcoin has become so complex that the amount of computer power, and as such electricity required in mining has become sizable. Therefore, the largest numbers of Bitcoin miners, geographically speaking, can be found in countries where access to cheaper energy resources is available. Because of energy concerns mining tends to gravitate towards countries with cheaper electricity.
Where Are The Miners?
In order not to risk of physical damage and to safeguard profitability, exact locations of the world’s miners remain undisclosed. However, percentages of user pools worldwide are available. A whopping 81% of all mining pools are currently based in China. The Czech Republic comes in at 10%, with Iceland, Japan, and Georgia equally sharing 6%, and Russia making up only 1% of the entire pool. Conditions change depending on a country’s renewable energy infrastructure improvements, but hardware developments appear to be outperforming either of those factors as extremely powerful microprocessors that require substantially less power and maintenance enter the market.
A new report suggests that previous electrical consumption estimates regarding cryptocurrency miners may be too high. Not only are many modern operations powered by cheap renewable energy, they may be using as little as roughly half the amount of energy previously suggested. “The argument has long gone that the carbon footprint of mining is anti-ethical to the world’s environmental needs,” says the head of CoinShares Research. “Our findings strictly contradict both of these figures and we believe that they rest on incorrect assumptions resulting from inadequate research.”
For the most part, Bitcoin cloud mining services are on the rise in places like Iceland, Sweden, and even upstate New York. In New York authorities have green-lighted a $700 million project to repurpose an 1300-acres aluminum plant by the end of 2019. “As long as Bitcoin network exists we anticipate mining to be profitable,” said Coinmint CEO Prieur Leary, adding the subsidiary launch “is a key milestone towards the Massena site reaching its full capacity.”
This year has seen multiple bids on projects and real estate in areas offering cheap electricity for the purposes of mining Bitcoin. Nonetheless, not all have struck a chord with local governments. For instance, residents of Quebec could soon encounter hostile regulations, with the region’s Premier Philippe Couillard iterating, “If you want to come settle here, plug in your servers, and do Bitcoin mining, we’re not really interested.”
PURA is a coin for a decentralized global community. It is the world’s first socially and environmentally conscious cryptocurrency designed with protocols that contribute up to 10% of its mining rewards to the common good. Thus, PURA is set to capture the hearts and minds of a growing subculture of purpose-driven users. Furthermore, PURA is one of very few coins to fund and track sustainable, environmental and social projects around the globe.
In addition, PURA’s “fair mining” code empowers individual miners to receive a fairer share of the mining rewards by enabling them to better compete with large mining pools without needing to invest large sums of money in specialized mining equipment.
By making the PURA network more attractive to higher volumes of individual miners, PURA seeks to ensure greater democratic freedom through more evenly distributed and therefore, decentralized mining power. This will enhance network performance through a more consistent and therefore stable level of network hash power. For more information regarding PURA Aurora AI, and the PURA wallet, please visit our website and read the PURA Whitepaper.