Crypto Currency Mining

yawhat!

Can anyone explain what this is. I see people online making rigs for it.

Do you do puzzles for money or what the hell is it?

SuperTortoise

From my very basic understanding of it (looked into it just last week to see what it was about), the miners process transactions where people use bitcoins to pay for stuff, and in turn the miner get a small percentage of the deal.

That's what i made of it anyway, i may be way off a well though!

Edit: Just seen the crypto in the thread title, no idea what that involves.

yawhat!

Doing a little more research on it and a good GPU is much better than a CPU.

Is is just you let your computer work away at solving math problems and you earn some coins?

Mind boggles.

Tij da feen

Not very feasible here in Ireland since there's a large initial cost and electricity prices are very high here so to even make your money back on your investment is difficult. Also the markets are very hard to predict for when to sell etc..

alb

Bitcoin was the first decentralised "crypto currency" but there are now many. It's digital money, not controlled by any company or single entity. The system is kept secure and validates transactions by a distributed network of computer nodes, known as miners. All the nodes compete with each other to validate the latest block of transactions first and the winner is rewarded by receiving newly minted coins and any transaction fees. Anyone is free to participate in mining.

If mining sounds like a chance to make easy money, forget about it, by now amateur hour is over for miners and it's a professional business. If you believe Bitcoin will be successful, it makes more sense to just buy some than mine it.

Fussgangerzone

yawhat! wrote: »

Doing a little more research on it and a good GPU is much better than a CPU.

Is is just you let your computer work away at solving math problems and you earn some coins?

That sounds like outdated info to me!

Originally, it was possible to "mine" bitcoins in the background while you worked. Hiowever, as the value went up, a sort of "arms race" started. Dedicated "mining rigs" chock full of graphics cards did the mining. This is because the more mining you do, the more coins you can get, they're distributed according to work carried out, and the total number is set.


A few years ago, graphics cards stopped being the best way forward. Now, you can get chips which have been purpose built for mining. However, mining the coins is as competetive as ever, so people are spending a fortune on these.

As the arms race continues, eventaully the cost of mining cryptocurrency will exceed the cost of electricity needed to mine them. Either something changes in the meantime, or it'll go splat.

Personally, I think it's a giant Ponzi scheme.

BloodBath

People using gpu's for mining aren't mining bitcoins. You need beastly asic systems with dozens of asic cpu's to make money at that now. It costs about 20 grand for the latest and greatest of these.

They are using gpu's to mine other script based crypto currencies which you can exchange for bitcoins and then for real currency.

It's not the slightest bit profitable in Ireland though. Our energy rates are too damn high.

Morf

https://www.youtube.com/watch?v=Gg5SwyTvAHw

Genghiz Cohen

Crypto Currency mining is the act of putting a set of numbers through a given Hashing Algorithm and then comparing the result to a set of rules given by the Crypto Network.
the hashes are very demanding and currently AMD GPUs are the fastest at doing them.

The hashing never changes, it's the strictness of the rules for the result that change.
For example, Bitcoin is now very difficult, the actual rule is there has to be n leading zeros on the resulting hash.

A simple example with the rule that there must be 3 leading zeros to pass.:
Input: 123456789
Output: 0478493020954
Result: Fail

Input: 234567891
Output: 0009374989034
Result: Success!

In the real world, the inputs and outputs are much longer and probably Hexadecimal, and the number of zeros greater.


When a successful hash is found, it is presented to the Bitcoin network (Other computers doing the hashing). And they say, yes, that is a good hash that no one has found before. The finder is then allowed to mint 25 new Bitcoins for themselves.

the hashes are used to secure the BlockChain, a public record of every transaction that has taken place. The mining computers are also checking transactions to make sure they are valid. (Stop people trying to spend BTC they don't have)

This is all done very quickly in human terms, I can get 112 MILLION of these tests per second and that is currently nowhere near enough to be profitable.

To be profitable you need cheap electricity and very fast hardware. 7970s do over 800 Million tests per second, so people used to string 4 or so together. Even that is too slow for BTC now so, as BloodBath said they mine LiteCoin or DodgeCoin and trade for BTC. Or use specialised hardware (Avoid Butterfly Labs, they are very shady).