How trade bitcoin miner

Keep in mind that this calculation will never be 100% accurate since you can’t know for sure the exact difficulty measurement at the moment, or what will happen to Bitcoin’s price a week from today.

3. Notable Mining Hardware Companies

Bitmain Technologies

The most well-known mining hardware manufacturer around, Bitmain was founded in 2013 in China and today has offices in several countries around the world.

The company developed the Antminer, a series of ASIC miners dedicated to mining cryptocurrencies such as Bitcoin, Litecoin, and Dash.

Bitmain is also in charge of two of the largest mining pools around: BTC.com and Antpool.

While Bitmain is respected for its technical excellence and reliable delivery, the company is also criticized by many Bitcoin enthusiasts for a variety of reasons:

• Its monopolization of ASIC manufacturing and mining
• Its role in delaying the SegWit upgrade to Bitcoin
• Its support and promotion of Bitcoin Cash
• Its alleged anti-competitive practices
• Its questionable methods, such as the Antbleed vulnerability and the covert AsicBoost scandal

It’s likely that the bulk of mining equipment today consists of Bitmain miners, based on analysis placing Bitmain’s share of the ASIC market at 70%–80%.

However, since these controversial events and some setbacks and closures, Bitmain has adopted a less aggressive business strategy. It’s likely that the bulk of mining equipment today consists of Bitmain miners, based on analysis placing Bitmain’s share of the ASIC market at 60%–70%.

MicroBT

MicroBT or Bit Micro is a relative newcomer to the space but a successful one; they sold 650,000 ASICs in 2019 and are shaping up to be a strong rival to Bitmain and Canaan. They are based in China, specifically the tech production hotspot of Shenzen.

MicroBT manufactures the Whatsminer range of ASICs, and have so far produced 5 series in this range: the Whatsminer D1, M10, M20, M21, and the current generation M30.

The company has certainly enjoyed a strong start, released some competitive products, and it will be exciting to follow their development.

Canaan Creative

Canaan was founded in 2013 in Beijing by N.G. Zhang. Canaan began as a producer of FPGAs, the mining hardware that preceded ASICs.

In November of 2019, Canaan raised a total of $90 million by listing on the Nasdaq, a tech-focused stock market in the USA. Canaan was the first ASIC manufacturer to list publicly.

Canaan is the world’s second-largest ASIC producer. The company has a wealth of experience in electronic design and production. It’s clear that this veteran industry player has big plans for its future.

Innosilicon Technology

Innosilicon is a hardware company with design teams in China and North America, Innosilicon pride themselves on providing low cost, high-performance, fully customizable solutions combined with award winning customer design support.

Their IP can be found in millions of mobile, multimedia and consumer electronic devices such as: tablets, cell phones, HD set-top boxes, TV, cameras, network devices, computing ICs that have achieved leading market shares.

The company has entered the cryptocurrency mining market and introduced the Terminator series for mining Bitcoin, with their latest miner being the T3+ Pro.

GMO Internet

*June 2020 update: Due to lack of profitability, GMO Internet has stopped producing mining hardware .

Japanese giant GMO Internet has also introduced a line of Bitcoin miners.

While GMO Internet is mainly engaged in the Internet infrastructure business, it also runs other businesses such as online advertising & media, Internet financial services, mobile entertainment, and of course cryptocurrency.

The company has also launched several crypto exchanges and it runs a mining business and cloud mining contracts.

Zhejiang Ebang Communication

Ebang mainly engages in R&D, manufacture and sales of fiber optical telecommunication products. The company is also one of the largest ASIC chip manufacturers in their region. Ebang miners carry the Ebit brand.

On April 2020 Ebang filed for an IPO on the U.S stock market listing , so the company definitely has big plans for the future.

Bitfury

Bitfury is a veteran Bitcoin hardware and software company formed back in 2011. The company conducts large-scale mining operations on its own and has been known to account for large amounts of the Bitcoin network hashrate.

The company offers several products including an ASIC mining chip called Clarke, an enterprise grade Bitcoin mining server called Tardis and a portable Bitcoin mining data center called BlockBox.

The company has data center operations in Iceland, the Republic of Georgia, Canada and Norway, which process and transmit bitcoin transactions.

The blockbox ac by Bitfury

4. Best Bitcoin Miners for 2021

While you can find a wide variety of miners on the market, it’s highly recommended to use the latest models out there since they will give you the best return on investment. Here’s a short overview of the top miners around.

Источник

How Does Bitcoin Mining Work?

What Is Bitcoin Mining?

Bitcoin mining is the process by which new bitcoins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger. It is performed using very sophisticated computers that solve extremely complex computational math problems.

Cryptocurrency mining is painstaking, costly, and only sporadically rewarding. Nonetheless, mining has a magnetic appeal for many investors interested in cryptocurrency because of the fact that miners are rewarded for their work with crypto tokens. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1849. And if you are technologically inclined, why not do it?

However, before you invest the time and equipment, read this explainer to see whether mining is really for you. We will focus primarily on Bitcoin (throughout, we’ll use «Bitcoin» when referring to the network or the cryptocurrency as a concept, and «bitcoin» when we’re referring to a quantity of individual tokens).

Key Takeaways

• By mining, you can earn cryptocurrency without having to put down money for it.
• Bitcoin miners receive Bitcoin as a reward for completing «blocks» of verified transactions, which are added to the blockchain.
• Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle first, and the probability that a participant will be the one to discover the solution is related to the portion of the total mining power on the network.
• You need either a GPU (graphics processing unit) or an application-specific integrated circuit (ASIC) in order to set up a mining rig.

A New Gold Rush

The primary draw for many mining is the prospect of being rewarded with Bitcoin. That said, you certainly don’t have to be a miner to own cryptocurrency tokens. You can also buy cryptocurrencies using fiat currency; you can trade it on an exchange like Bitstamp using another crypto (as an example, using Ethereum or NEO to buy Bitcoin); you even can earn it by shopping, publishing blog posts on platforms that pay users in cryptocurrency, or even set up interest-earning crypto accounts.

An example of a crypto blog platform is Steemit, which is kind of like Medium except that users can reward bloggers by paying them in a proprietary cryptocurrency called STEEM. STEEM can then be traded elsewhere for Bitcoin.

The Bitcoin reward that miners receive is an incentive that motivates people to assist in the primary purpose of mining: to legitimize and monitor Bitcoin transactions, ensuring their validity. Because these responsibilities are spread among many users all over the world, Bitcoin is a «decentralized» cryptocurrency, or one that does not rely on any central authority like a central bank or government to oversee its regulation.

How to Mine Bitcoins

Miners are getting paid for their work as auditors. They are doing the work of verifying the legitimacy of Bitcoin transactions. This convention is meant to keep Bitcoin users honest and was conceived by Bitcoin’s founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the «double-spending problem.»

Double spending is a scenario in which a Bitcoin owner illicitly spends the same bitcoin twice. With physical currency, this isn’t an issue: once you hand someone a $20 bill to buy a bottle of vodka, you no longer have it, so there’s no danger you could use that same $20 bill to buy lotto tickets next door. While there is the possibility of counterfeit cash being made, it is not exactly the same as literally spending the same dollar twice. With digital currency, however, as the Investopedia dictionary explains, «there is a risk that the holder could make a copy of the digital token and send it to a merchant or another party while retaining the original.»

Let’s say you had one legitimate $20 bill and one counterfeit of that same $20. If you were to try to spend both the real bill and the fake one, someone that took the trouble of looking at both of the bills’ serial numbers would see that they were the same number, and thus one of them had to be false. What a Bitcoin miner does is analogous to that—they check transactions to make sure that users have not illegitimately tried to spend the same bitcoin twice. This isn’t a perfect analogy—we’ll explain in more detail below.

Once miners have verified 1 MB (megabyte) worth of Bitcoin transactions, known as a «block,» those miners are eligible to be rewarded with a quantity of bitcoin (more about the bitcoin reward below as well). The 1 MB limit was set by Satoshi Nakamoto, and is a matter of controversy, as some miners believe the block size should be increased to accommodate more data, which would effectively mean that the bitcoin network could process and verify transactions more quickly.

Note that verifying 1 MB worth of transactions makes a coin miner eligible to earn bitcoin—not everyone who verifies transactions will get paid out.

1MB of transactions can theoretically be as small as one transaction (though this is not at all common) or several thousand. It depends on how much data the transactions take up.

«So after all that work of verifying transactions, I might still not get any bitcoin for it?»

That is correct.

To earn bitcoins, you need to meet two conditions. One is a matter of effort; one is a matter of luck.

1) You have to verify

1MB worth of transactions. This is the easy part.

2) You have to be the first miner to arrive at the right answer, or closest answer, to a numeric problem. This process is also known as proof of work.

«What do you mean, ‘the right answer to a numeric problem’?»

The good news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems—that’s not exactly true. What they’re actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a «hash») that is less than or equal to the target hash. It’s basically guesswork.

The bad news: It’s guesswork, but with the total number of possible guesses for each of these problems being on the order of trillions, it’s incredibly arduous work. In order to solve a problem first, miners need a lot of computing power. To mine successfully, you need to have a high «hash rate,» which is measured in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s).

That is a great many hashes.

If you want to estimate how much bitcoin you could mine with your mining rig’s hash rate, the site Cryptocompare offers a helpful calculator.

Mining and Bitcoin Circulation

In addition to lining the pockets of miners and supporting the Bitcoin ecosystem, mining serves another vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically «minting» currency. For example, as of Nov. 2020, there were around 18.5 million bitcoins in circulation.

Aside from the coins minted via the genesis block (the very first block, which was created by founder Satoshi Nakamoto), every single one of those bitcoins came into being because of miners. In the absence of miners, Bitcoin as a network would still exist and be usable, but there would never be any additional bitcoin. There will eventually come a time when Bitcoin mining ends; per the Bitcoin Protocol, the total number of bitcoins will be capped at 21 million.

However, because the rate of bitcoin «mined» is reduced over time, the final bitcoin won’t be circulated until around the year 2140. This does not mean that transactions will cease to be verified. Miners will continue to verify transactions and will be paid in fees for doing so in order to keep the integrity of Bitcoin’s network.

Aside from the short-term Bitcoin payoff, being a coin miner can give you «voting» power when changes are proposed in the Bitcoin network protocol. In other words, miners have a degree of influence on the decision-making process on such matters as forking.

How Much a Miner Earns

The rewards for Bitcoin mining are reduced by half every four years. When bitcoin was first mined in 2009, mining one block would earn you 50 BTC. In 2012, this was halved to 25 BTC. By 2016, this was halved again to 12.5 BTC. On May 11, 2020, the reward halved again to 6.25 BTC. In November of 2020, the price of Bitcoin was about $17,900 per bitcoin, which means you’d earn $111,875 (6.25 x 17,900) for completing a block. Not a bad incentive to solve that complex hash problem detailed above, it might seem.

If you want to keep track of precisely when these halvings will occur, you can consult the Bitcoin Clock, which updates this information in real-time. Interestingly, the market price of Bitcoin has, throughout its history, tended to correspond closely to the reduction of new coins entered into circulation. This lowering inflation rate increased scarcity and historically the price has risen with it.

If you are interested in seeing how many blocks have been mined thus far, there are several sites, including Blockchain.info, that will give you that information in real-time.

What Do I Need To Mine Bitcoins?

Although early on in Bitcoin’s history individuals may have been able to compete for blocks with a regular at-home computer, this is no longer the case. The reason for this is that the difficulty of mining Bitcoin changes over time.

In order to ensure the smooth functioning of the blockchain and its ability to process and verify transactions, the Bitcoin network aims to have one block produced every 10 minutes or so. However, if there are one million mining rigs competing to solve the hash problem, they’ll likely reach a solution faster than a scenario in which 10 mining rigs are working on the same problem. For that reason, Bitcoin is designed to evaluate and adjust the difficulty of mining every 2,016 blocks, or roughly every two weeks.

When there is more computing power collectively working to mine for bitcoins, the difficulty level of mining increases in order to keep block production at a stable rate. Less computing power means the difficulty level decreases. To get a sense of just how much computing power is involved, when Bitcoin launched in 2009 the initial difficulty level was one. As of Nov. 2019, it is more than 13 trillion.

All of this is to say that, in order to mine competitively, miners must now invest in powerful computer equipment like a GPU (graphics processing unit) or, more realistically, an application-specific integrated circuit (ASIC). These can run from $500 to the tens of thousands. Some miners—particularly Ethereum miners—buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations.

The photo below is a makeshift, homemade mining machine. The graphics cards are those rectangular blocks with whirring fans. Note the sandwich twist-ties holding the graphics cards to the metal pole. This is probably not the most efficient way to mine, and as you can guess, many miners are in it as much for the fun and challenge as for the money.

The «Explain It Like I’m Five» Version

The ins and outs of Bitcoin mining can be difficult to understand as is. Consider this illustrative example of how the hash problem works: I tell three friends that I’m thinking of a number between one and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don’t have to guess the exact number; they just have to be the first person to guess any number that is less than or equal to the number I am thinking of. And there is no limit to how many guesses they get.

Let’s say I’m thinking of the number 19. If Friend A guesses 21, they lose because of 21>19. If Friend B guesses 16 and Friend C guesses 12, then they’ve both theoretically arrived at viable answers, because of 16

What Is a «64-Digit Hexadecimal Number»?

Well, here is an example of such a number:

The number above has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not just of numbers, but also letters of the alphabet. Why is that?

To understand what these letters are doing in the middle of numbers, let’s unpack the word «hexadecimal.»

As you know, we use the «decimal» system, which means it is base 10. This, in turn, means that every digit of a multi-digit number has 10 possibilities, zero through nine.

«Hexadecimal,» on the other hand, means base 16, as «hex» is derived from the Greek word for six and «deca» is derived from the Greek word for 10. In a hexadecimal system, each digit has 16 possibilities. But our numeric system only offers 10 ways of representing numbers (zero through nine). That’s why you have to stick letters in, specifically letters a, b, c, d, e, and f.

If you are mining Bitcoin, you do not need to calculate the total value of that 64-digit number (the hash). I repeat: You do not need to calculate the total value of a hash.

So, what do «64-digit hexadecimal numbers» have to do with Bitcoin mining?

Remember that ELI5 analogy, where I wrote the number 19 on a piece of paper and put it in a sealed envelope?

In Bitcoin mining terms, that metaphorical undisclosed number in the envelope is called the target hash.

What miners are doing with those huge computers and dozens of cooling fans is guessing at the target hash. Miners make these guesses by randomly generating as many «nonces» as possible, as fast as possible. A nonce is short for «number only used once,» and the nonce is the key to generating these 64-bit hexadecimal numbers I keep talking about. In Bitcoin mining, a nonce is 32 bits in size—much smaller than the hash, which is 256 bits. The first miner whose nonce generates a hash that is less than or equal to the target hash is awarded credit for completing that block and is awarded the spoils of 6.25 BTC.

In theory, you could achieve the same goal by rolling a 16-sided die 64 times to arrive at random numbers, but why on earth would you want to do that?

The screenshot below, taken from the site Blockchain.info, might help you put all this information together at a glance. You are looking at a summary of everything that happened when block #490163 was mined. The nonce that generated the «winning» hash was 731511405. The target hash is shown on top. The term «Relayed by Antpool» refers to the fact that this particular block was completed by AntPool, one of the more successful mining pools (more about mining pools below).

As you see here, their contribution to the Bitcoin community is that they confirmed 1768 transactions for this block. If you really want to see all 1768 of those transactions for this block, go to this page and scroll down to the heading «Transactions.»

«So how do I guess at the target hash?»

All target hashes begin with zeros—at least eight zeros and up to 63 zeros.

There is no minimum target, but there is a maximum target set by the Bitcoin Protocol. No target can be greater than this number:

Here are some examples of randomized hashes and the criteria for whether they will lead to success for the miner:

«How do I maximize my chances of guessing the target hash before anyone else does?»

You’d have to get a fast mining rig, or, more realistically, join a mining pool—a group of coin miners who combine their computing power and split the mined Bitcoin. Mining pools are comparable to those Powerball clubs whose members buy lottery tickets en masse and agree to share any winnings. A disproportionately large number of blocks are mined by pools rather than by individual miners.

In other words, it’s literally just a numbers game. You cannot guess the pattern or make a prediction based on previous target hashes. The difficulty level of the most recent block at the time of writing is about 17.59 trillion, meaning that the chance of any given nonce producing a hash below the target is one in 17.59 trillion. Not great odds if you’re working on your own, even with a tremendously powerful mining rig.

«How do I decide whether Bitcoin will be profitable for me?»

Not only do miners have to factor in the costs associated with expensive equipment necessary to stand a chance of solving a hash problem. They must also consider the significant amount of electrical power mining rigs utilize in generating vast quantities of nonces in search of the solution. All told, Bitcoin mining is largely unprofitable for most individual miners as of this writing. The site Cryptocompare offers a helpful calculator that allows you to plug in numbers such as your hash speed and electricity costs to estimate the costs and benefits.

What Are Coin Mining Pools?

Mining rewards are paid to the miner who discovers a solution to the puzzle first, and the probability that a participant will be the one to discover the solution is equal to the portion of the total mining power on the network.

Participants with a small percentage of the mining power stand a very small chance of discovering the next block on their own. For instance, a mining card that one could purchase for a couple of thousand dollars would represent less than 0.001% of the network’s mining power. With such a small chance at finding the next block, it could be a long time before that miner finds a block, and the difficulty going up makes things even worse. The miner may never recoup their investment. The answer to this problem is mining pools.

Mining pools are operated by third parties and coordinate groups of miners. By working together in a pool and sharing the payouts among all participants, miners can get a steady flow of bitcoin starting the day they activate their miners. Statistics on some of the mining pools can be seen on Blockchain.info.

«I’ve done the math. Forget mining. Is there a less onerous way to profit from cryptocurrencies?»

As mentioned above, the easiest way to acquire Bitcoin is to simply buy it on one of the many exchanges. Alternately, you can always leverage the «pickaxe strategy.» This is based on the old saw that during the 1849 California gold rush, the smart investment was not to pan for gold, but rather to make the pickaxes used for mining.

To put it in modern terms, invest in the companies that manufacture those pickaxes. In a cryptocurrency context, the pickaxe equivalent would be a company that manufactures equipment used for Bitcoin mining. You may consider looking into companies that make ASICs equipment or GPUs instead, for example.

Is Bitcoin Mining Legal?

The legality of Bitcoin mining depends entirely on your geographic location. The concept of Bitcoin can threaten the dominance of fiat currencies and government control over the financial markets. For this reason, Bitcoin is completely illegal in certain places.

Bitcoin ownership and mining are legal in more countries than not. Some examples of places where it is illegal are Algeria, Egypt, Morocco, Bolivia, Ecuador, Nepal, and Pakistan.   Overall, Bitcoin use and mining are legal across much of the globe.

Risks of Mining

The risks of mining are often that of financial risk and a regulatory one. As mentioned, Bitcoin mining, and mining in general, is a financial risk. One could go through all the effort of purchasing hundreds or thousands of dollars worth of mining equipment only to have no return on their investment. That said, this risk can be mitigated by joining mining pools. If you are considering mining and live in an area that it is prohibited you should reconsider. It may also be a good idea to research your countries regulation and overall sentiment towards cryptocurrency before investing in mining equipment.

One additional potential risk from the growth of Bitcoin mining (and other proof-of-work systems as well) is the increasing energy usage required by the computer systems running the mining algorithms. While microchip efficiency has increased dramatically for ASIC chips, the growth of the network itself is outpacing technological progress. As a result, there are concerns about the environmental impact and carbon footprint of Bitcoin mining.

There are, however, efforts to mitigate this negative externality by seeking cleaner and green energy sources for mining operations (such as geo-thermal or solar), as well as utilizing carbon offset credits. Switching to less energy-intensive consensus mechanisms like proof-of-stake (PoS), which Ethereum is planning to do, is another strategy; however, PoS comes with its own set of drawbacks and inefficiencies.

Источник