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A Bitcoin mining machine is a computer used to earn Bitcoin. This type of computer generally has a professional mining chip, and most of them work by installing a large number of graphics cards, which consumes a lot of power. The computer downloads the mining software and runs a specific algorithm. After communicating with the remote server, the corresponding bitcoin can be obtained, which is one of the ways to obtain bitcoin ^[1] .

Chinese name: Bitcoin mining machine
Foreign name: Bitcoin mining machine
Explain: Computers that earn Bitcoin

Features: Professional mining chip
Classification: ASIC, GPU, IPFS, FPGA, etc.
Field: Blockchain finance

Bitcoin mining machine features

Bitcoin miners are one of the ways to get Bitcoin. Bitcoin is a network virtual currency generated by open source P2P software. It does not rely on the issuance of a specific currency institution and is generated through a large number of calculations by a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. The decentralized nature of P2P and the algorithm itself can ensure that the value of coins cannot be manipulated artificially by making a large number of Bitcoins ^[1] .

Any computer can become a mining machine, but the benefit will be relatively low, and it may not be able to mine a bitcoin for ten years. Many companies have developed professional Bitcoin mining machines. Such mining machines equipped with special mining chips are tens or hundreds of times faster than ordinary computer computing speeds ^[1] .

Bitcoin mining machine principle

The Bitcoin system consists of users (the user controls the wallet through the key), transactions (transactions will be broadcast to the entire Bitcoin network), and miners (through competition calculations to generate a consensus blockchain at each node, the blockchain is a distribution A public authority account book of the same type, which contains all transactions occurring in the Bitcoin network). ^[2]

Bitcoin miners manage the Bitcoin network by solving the problem of proof-of-work with a certain amount of workconfirming transactions and preventing double payments. Because the hash operation is irreversible, it is very difficult to find the random adjustment required by the match, and a continuous trial and error process that can predict the total number of times is required. At this point, the proof-of-work mechanism comes into play. When a node finds a solution that matches the requirements, then it can broadcast its results to the entire network. Other nodes can receive this newly solved data block and check whether it matches the rules. If other nodes find that the requirements are indeed satisfied by computing the hash value (the computing target required by Bitcoin), then the data block is valid, and other nodes will accept the data block ^[3] .

Satoshi Nakamoto compared the consumption of CPU power and time to generate bitcoin, which is likened to the gold mine consuming resources to inject gold into the economy. Bitcoin's mining and node software mainly initiates zero-knowledge proof and verification transactions through peer-to-peer networks, digital signatures, and interactive proof systems. Each network node broadcasts transactions to the network. After the broadcasted transactions are verified by the miner (a computer on the network), the miner can use his own proof of work to express confirmation. The confirmed transaction will be packed into data blocks. In the process, data blocks will be strung together to form a continuous data block chain. Each Bitcoin node will collect all unconfirmed transactions and group them into a data block. The miner node will append a random adjustment number and calculate the SHA256 hash operation value of the previous data block. The mining node keeps trying repeatedly until the random adjustments it finds make the resulting hash value lower than a certain target ^[3] .

Bitcoin mining machine mining process

Mining is a process that increases the supply of bitcoin money. Mining also protects the security of the bitcoin system, prevents fraudulent transactions, and avoids "double payment". "Dual payment" refers to spending the same bitcoin multiple times. Miners provide algorithms for the Bitcoin network in exchange for the opportunity to earn Bitcoin rewards. Miners verify each new transaction and record them in the general ledger. Every 10 minutes, a new block is "mined". Each block contains all transactions that have occurred from the previous block to the current period. These transactions are added to the blockchain in turn. in. We refer to the transactions contained in the block and added to the blockchain as "confirmation" transactions. After the transaction is "confirmed", the new owner can spend the bitcoin he obtained in the transaction ^[2] .

Miners receive two types of rewards during the mining process: new coin rewards for creating new blocks, and transaction fees for transactions contained in the blocks. In order to get these rewards, miners scramble to complete a mathematical puzzle based on a cryptographic hash algorithm, that is, the use of a bitcoin mining machine for hash algorithm calculations. This requires strong computing power, how many calculation processes, and good calculation results. Bad as proof of the miner's calculation workload is called "proof of workload". The algorithm's competition mechanism and the winner's right to record transactions on the blockchain, both of which ensure the security of Bitcoin ^[2] .

Miners also receive transaction fees. Each transaction may include a transaction fee, which is the difference between the input and output of each transaction record. Miners who successfully "mined" a new block during the mining process can get "tips" for all transactions contained in the block. As the mining rewards decrease and the number of transactions included in each block increases, the proportion of transaction fees in the miner's revenue will gradually increase. After 2140, all miner income will be made up of transaction fees ^[2] .

Mining is a decentralized process of settlement, and each settlement verifies and resolves the processed transactions. Mining protects the security of the Bitcoin system and realizes that the entire Bitcoin network can reach consensus without a central institution. The invention of mining makes Bitcoin very special. This decentralized security mechanism is the basis of peer-to-peer electronic money. The rewards and transaction fees for minting new coins are an incentive mechanism that can regulate the behavior of miners and network security, and at the same time complete the issuance of Bitcoin currency ^[2] .

Bitcoin mining machine revenue

Bitcoin issuance and transaction completion are achieved through mining, which is minted at a certain but continuously slowing rate. Each new block is accompanied by a certain number of new Bitcoins from scratch, which are rewarded as coinbase transactions to miners who find the block. The rewards of each block are not fixed. For every 210,000 blocks mined, it takes about 4 years and the currency issuance rate is reduced by 50%. In the first four years of Bitcoin operation, 50 new Bitcoins were created per block. 12.5 new Bitcoins are created per block. In addition to block rewards, miners will also receive fees for all transactions in the block ^[4] .

Risks of Bitcoin miners

Bitcoin mining electrical and mechanical fees

If the graphics card is "mined" to keep the graphics card fully loaded for a long time, the power consumption will be quite high, and the electricity bill will become higher and higher. There are many professional mines at home and abroad that operate in areas with extremely low electricity costs, such as hydropower stations, and more users can only mine at home or in ordinary mines. Naturally, electricity costs are not cheap. Even a case in Yunnan where some people carried out crazy mining led to a large area trip and the transformer was burned ^[5] .

Bitcoin miner hardware spending

Mining is actually a competition of performance and equipment. Some mining machines are composed of more such graphics card arrays. Dozens or even hundreds of graphics cards come together. Various costs such as hardware prices are very high. Mining There is considerable expenditure. In addition to graphics card-burning machines, some ASIC (application-specific integrated circuit) professional mining machines are also being put on the battlefield. ASICs are specially designed for hash computing, and their computing power is quite strong. And because their power consumption is much lower than that of graphics cards, Therefore, it is easier to form a scale, and the electricity cost is lower. It is difficult for a single leaflet to compete with these mining machines, but at the same time, the cost of such machines is also greater ^[6] .

Bitcoin miner currency security

Bitcoin withdrawal requires as many as hundreds of keys, and most people record this long string of numbers on a computer, but often problems such as hard disk damage can cause the keys to be permanently lost, which also results in The loss of Bitcoin ^[7] .

Bitcoin mining system risk

System risk is very common in Bitcoin, and the most common is a fork. The fork will lead to a drop in the price of the currency and a sharp decline in mining revenue. However, many cases have shown that the fork actually gives miners a profit. The forked competitive coins also require the miner's computing power to complete the minting and transaction process. In order to win more miners, the competitive coins will provide more block rewards and Fees to attract miners. Risks have instead made miners ^[8] .

Bitcoin mining machine type

ASIC Bitcoin mining machine ASIC miner

ASIC mining machine refers to a mining machine that uses an ASIC chip as its core computing part. ASIC chip is a kind of chip designed for a specific purpose. It must be noted that it is not only used for mining, but also has a wider range of applications. The characteristics of this chip are simple and efficient. For example, Bitcoin uses the SHA256 algorithm, then the Bitcoin ASIC miner chip is designed to only calculate SHA256, so as far as mining is concerned, the performance of the ASIC miner chip exceeds the current top-level Computer CPU. Because ASIC miners have absolute advantages in computing power, computers and graphics card miners have gradually been eliminated ^[6] .

GPU Bitcoin mining machine GPU mining machine

GPU mining machine, a simple explanation is a digital currency mining machine that uses graphics card (GPU) mining. After Bitcoin, some other digital assets have appeared one after another, such as Ethereum, Dash, Litecoin, etc.Some of these coins use different algorithms than Bitcoin. In order to achieve higher mining efficiency, miners After doing different tests, it was found that digital currencies with the SHA256 algorithm use ASIC mining to be the most efficient. However, the digital currency of Scrypt and other algorithms uses the GPU graphics card to have the highest mining efficiency, so a specialized GPU mining machine has been spawned ^[6] .

IPFS Bitcoin mining machine IPFS miner

IPFS is similar to http and is a file transfer protocol. For IPFS to run, there need to be many computers (storage devices) in the network as nodes. Broadly speaking, all participating computers can be called IPFS miners. In order to attract more users to become nodes and contribute to the network, the IPFS network has designed a cryptocurrency called filecoin, which is distributed to participants (nodes) as rewards based on the amount of contributed storage space and bandwidth. In a narrow sense, a computer specifically designed to obtain filecoin rewards is called an IPFS miner. Because the IPFS network requires storage space and network bandwidth, in order to obtain the highest revenue ratio, IPFS miners usually strengthen storage space and reduce overall power consumption. For example, equipped with more than 10 large-capacity hard disks, equipped with gigabit or higher speed network cards, using ultra-low-power architecture processors, etc. ^[6] .

FPGA Bitcoin mining machine FPGA miner

FPGA mining machine, which uses FPGA chip as the core of computing power. FPGA mining machine is one of the early mining machines. It first appeared in the end of 2011. At that time, it was favored, but the active period was not long, and it was gradually replaced by ASIC mining machine and GPU mining machine. FPGA (Field-Programmable Gate Array), Chinese name is Field Programmable Gate Array. A more common understanding is that an FPGA is a package of a large number of logic devices (such as AND gates, NOT gates, OR gates, and selectors) in a box. The logic elements in the box are connected by the user (programming). To decide ^[6] .

If the mining program is written in FPGA, then FPGA mining machine is created, and because FPGA is highly flexible, it can not only support Bitcoin's SHA256 algorithm, but also support GPU mining machine's Scrypt algorithm. During the period when FPGA mining machines were active, compared with the CPU and GPU mining machines of the same generation, FPGAs had lower computing power performance, but lower power consumption and higher overall power consumption ratio ^[1] .