Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, since the system works without a central repository or single administrator. It was invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Wallets for Digital Currency
A wallet stores the information necessary to transact bitcoins. While wallets are often described as a place to hold or store bitcoins, due to the nature of the system, bitcoins are inseparable from the blockchain transaction ledger. A better way to describe a wallet is something that “stores the digital credentials for your bitcoin holdings” and allows one to access (and spend) them. Bitcoin uses public-key cryptography, in which two cryptographic keys, one public and one private, are generated. At its most basic, a wallet is a collection of these keys.
There are several types of wallets. Software wallets connect to the network and allow spending bitcoins in addition to holding the credentials that prove ownership.
Mining is a record-keeping service. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Each block contains a cryptographic hash of the previous block, using the SHA-256 hashing algorithm, which links it to the previous block, thus giving the blockchain its name.
In order to be accepted by the rest of the network, a new block must contain a so-called proof-of-work. The proof-of-work requires miners to find a number called a nonce, such that when the block content is hashed along with the nonce, the result is numerically smaller than the network’s difficulty target. This proof is easy for any node in the network to verify, but extremely time-consuming to generate, as for a secure cryptographic hash, miners must try many different nonce values before meeting the difficulty target.
Application-specific integrated circuit ( ASIC )
Miners have taken over completely. These ASIC machines mine at unprecedented speeds while consuming much less power than FPGA or GPU mining rigs. Several reputable companies have established themselves with excellent products.
A bitcoin machine solves a complex algorithm and receives a reward in the form of a small fraction of bitcoin. The machine is specially built for this purpose and this purpose alone.
Graphic processing unit (GPU)
GPU mining in short
A graphics card solves a complex algorithm and receives a reward in the form of the current cryptocurrency it is mining. There are many different types of GPU mining currencies. Computers are the main mining machine in GPU mining.
Why we currently choose GPU
Graphics cards are already being bought and sold second hand globally. This market is huge locally and internationally and easy to reach via advertising. The key here is to use your graphics card until you have recovered your initial investment and made some profit while there is still some warranty left on your card. This would be the perfect time to sell. If the profitability is still sufficient there is no need to upgrade. The usual warranty on a graphics card is about three years. ASIC miners have a warranty of about three months. They are harder to resell as they tend to be more expensive and fall within a niche market.
GPU miners are normal computers. As we write this blog, we are also mining. However, we do sell custom rigs that are built to the extreme and harness the graphics cards’ computing powers to keep costs to a minimum. In contrast, ASIC miners are built only to mine bitcoin and you cannot use it as a desktop computer.
We have found that GPU mining’s power usage is way lower than that of ASIC miners. Saving power saves money. We have also had success running our rig on a solar-power system. We wouldn’t advise you to acquire a solar-power system for this purpose only as they are expensive, but if you already have one it could probably be utilised. Mining off the grid is possible.
ASIC miners tend to be loud as a result of the large fan that has to run constantly in order to keep the machine cool. There are many videos regarding this problem on the web. GPU miners also have fans but to a much smaller scale and won’t make more noise than a gaming computer.
To upgrade a GPU miner involves upgrading your graphics card. To upgrade a graphics card is easy and usually, you need not buy an entire new computer. To upgrade an ASIC miner you need to buy a new machine completely. Unless you are upgrading on an enormous scale, upgrading your gaming PC with a new graphics card will then also increase your mining capabilities at the same time. Win-win situation.
Return on investment is faster
Since graphics cards are more affordable than ASIC miners, your return on investment is faster. Do the maths.