https://tests.bitcoin.it/w/api.php?action=feedcontributions&user=Vwm3nelson&feedformat=atomBitcoin Wiki - User contributions [en]2024-03-29T04:57:20ZUser contributionsMediaWiki 1.30.0https://tests.bitcoin.it/w/index.php?title=Mining&diff=48760Mining2014-07-12T19:17:15Z<p>Vwm3nelson: /* Mining services (Cloud mining) */</p>
<hr />
<div><!-- This page is designed to be short and simple! It should provide only a very brief explanation of things that have their own page and should link to other pages whenever possible. This page should serve as an entry point and a place to organize most of our mining articles. Thank You! (-Atheros) --><br />
[[File:Quick-and-dirty-4x5970-cooling.jpg|thumb|right|A quick and dirty mining rig]]<br />
== Introduction ==<br />
'''Mining''' is the process of adding transaction records to Bitcoin's public ledger of past transactions.<br />
This ledger of past transactions is called the [[block chain]] as it is a chain of [[block|blocks]].<br />
The block chain serves to [[Confirmation|confirm]] transactions to the rest of the network as having taken place.<br />
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.<br />
<br />
Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual [[blocks]] must contain a [[proof of work|proof of work]] to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the [[hashcash]] proof-of-work function.<br />
<br />
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.<br />
Mining is also the mechanism used to introduce Bitcoins into the system:<br />
Miners are paid any transaction fees as well as a "subsidy" of newly created coins.<br />
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.<br />
<br />
Bitcoin mining is so called because it resembles the mining of other commodities:<br />
it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.<br />
<br />
== Difficulty ==<br />
=== The Computationally-Difficult Problem ===<br />
Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the [[Target|target]] in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a [[Nonce|nonce]] is incremented. See [[Proof of work]] for more information.<br />
<br />
=== The Difficulty Metric ===<br />
The [[Difficulty|difficulty]] is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty [[Target|target]] will simply be rejected by everyone on the network and thus will be worthless. <br />
<br />
=== Reward ===<br />
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See [[Controlled Currency Supply]].<br />
<br />
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.<br />
<br />
== The mining ecosystem ==<br />
<br />
=== Hardware ===<br />
[[File:Usb-fpga module 1.15x-hs-800.jpg|thumb|right|FPGA Module]]<br />
Users have used various types of hardware over time to mine blocks. Hardware specifications and performance statistics are detailed on the [[Mining Hardware Comparison]] page.<br />
==== CPU Mining ==== <br />
Early Bitcoin client versions allowed users to use their CPUs to mine. The advent of GPU mining made CPU mining financially unwise as the hashrate of the network grew to such a degree that the amount of bitcoins produced by CPU mining became lower than the cost of power to operate a CPU. The option was therefore removed from the core Bitcoin client's user interface.<br />
<br />
==== GPU Mining ====<br />
GPU Mining is drastically faster and more efficient than CPU mining. See the main article: [[Why a GPU mines faster than a CPU]]. A variety of popular [[Mining rig|mining rigs]] have been documented.<br />
==== FPGA Mining ====<br />
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See [[Mining Hardware Comparison]] for FPGA hardware specifications and statistics.<br />
==== ASIC Mining ====<br />
An application-specific integrated circuit, or ''ASIC'', is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially unwise in some countries and setups.<br />
<br />
==== Mining services (Cloud mining) ====<br />
[[:Category:Mining_contractors|Mining contractors]] provide mining services with performance specified by contract, often referred to as a "Mining Contract". They may, for example, rent out a specific level of mining capacity for a set price for a specific duration.<br />
<br />
=== Pools ===<br />
As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving any reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into [[Pooled mining|pools]] so that they could share rewards more evenly. See [[Pooled mining]] and [[Comparison of mining pools]].<br />
<br />
=== History ===<br />
Bitcoin's public ledger (the 'block chain') was started on January 3rd, 2009 at 18:15 UTC presumably by [[Satoshi Nakamoto]]. The first block is known as the [[genesis block]]. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.<br />
<br />
==See Also==<br />
<br />
* [http://BitcoinMiner.net Comprehensive Guide Bitcoin Miner and Mining]<br />
* [http://codinginmysleep.com/bitcoin-mining-in-plain-english Bitcoin Mining in Plain English] by David Perry<br />
* [[Automatically mine when computer is locked|Tutorial to automatically start mining when you lock your computer]]. (Windows 7)<br />
* [http://www.reddit.com/r/Bitcoin/comments/18q2jx/eli5_bitcoin_mining_xpost_in_eli5/ Simplified Explanation of Bitcoin Mining] by reddit user [http://www.reddit.com/user/azotic azotic]<br />
* [http://www.vnbitcoin.org/bitcoincalculator.php Bitcoin Mining Calculator]<br />
* [http://www.MiningContracts.com Research, Review and Compare Cloud Mining Contracts]<br />
[[ru:Mining]]<br />
[[Category:Mining]][[Category:Vocabulary]]</div>Vwm3nelsonhttps://tests.bitcoin.it/w/index.php?title=Hardware_wallet&diff=48580Hardware wallet2014-07-02T06:03:56Z<p>Vwm3nelson: /* Related Resources */</p>
<hr />
<div>A '''hardware wallet''' is a device that stores a part of a user's [[wallet]] securely in mostly-offline hardware. They have major advantages over other wallet types:<br />
<br />
* the key is often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext<br />
* immune to computer viruses that steal from software wallets<br />
* can be used securely and interactively, as opposed to a [[paper wallet]] which must be imported to software at some point<br />
* much of the time, the software is open source, allowing a user to validate the entire operation of the device<br />
<br />
This page is an attempt to summarize all the known developments of hardware wallets that can use Bitcoin as part of their operation.<br />
<br />
<br />
<br />
== Purchasable hardware wallets ==<br />
<br />
=== [[TREZOR]] The Bitcoin Safe ===<br />
[http://bitcointrezor.com BitcoinTrezor.com]<br />
[[File:Trezor-tx.jpg|300px|thumb|left|Confirming transaction with TREZOR]]<br />
<br />
<br />
[http://bitcointrezor.com/faq/ FAQ @BitcoinTrezor.com]<br />
<br />
[[TREZOR]] is a secure bitcoin storage and a transaction signing tool. <br />
<br />
The private keys generated by the device never leave it and cannot be accessed by a malware. Thanks to a limited USB protocol only a payment template can be sent into the device (address and amount) which then has to be confirmed by a physical user interaction (visual verification of the transaction details and pressing the confirmation button).<br />
<br />
[[TREZOR]] uses a deterministic wallet structure which means it can hold an unlimited number of keys (BIP32). <br />
<br />
A recovery seed is generated when the device is initialized. In case it gets lost or stolen, all it's contents can be recovered using the seed (private keys, bitcoin balance and transaction history) into a new device or another BIP39 compatible wallet. <br />
<br />
[[TREZOR]] introduced a unique way of PIN entering preventing keyloggers from recording it even when entered on a compromised computer.<br />
<br />
An encryption passphrase can be set on top of the PIN protection. More passphrases can be used for plausible deniability.<br />
<br />
<br clear="all"><br />
<br />
=== Pi Wallet - cold storage ===<br />
[[File:Piwallet.jpeg|300px|thumb|left|Pi-Wallet]]<br />
[http://www.pi-wallet.com/ Pi-Wallet Shop]<br />
<br />
[http://www.pi-wallet.com/pages/what-is-pi-wallet Further informations about Pi-Wallet]<br />
<br />
The Pi-Wallet is comparable to an offline Notebook. <br />
<br />
However it combines all features of the Armory bitcoin client (e.g. offline transaction signing) with the advantages of a tiny computer.<br />
<br />
To sign offline-transaction you will need an (unused) USB stick.<br />
<br />
<br />
<br clear="all"><br />
<br />
== Not purchasable hardware wallets ==<br />
<br />
=== BitcoinCard Megion Technologies-Card based wallet ===<br />
[[File:Bitcoincard-medley-large.jpg|400px|thumb|left|Bitcoin Card]]<br />
[http://www.bitcoincard.org/ Bitcoincard Home Page]<br />
<br />
[http://blog.bitinstant.com/blog/2012/6/19/our-discovery-in-vienna-the-bitcoin-card.html Excellent review by evoorhees]<br />
<br />
Incorporates a e-paper display, keypad, and radio (custom ISM band protocol.) Unfortunately it is fairly limited in terms of transaction I/O, requiring a radio gateway or another bitcoincard wherever funds need to be transferred.<br />
<br />
<br clear="all"><br />
<br />
=== BitSafe - allten/someone42's hardware wallet ===<br />
[[File:Bitsafe-wallet-sizecompare.jpg|200px|thumb|left|Bitsafe wallet]]<br />
[https://bitcointalk.org/index.php?topic=127587.0 BitSafe Hardware Wallet Development - BOM Ready - 50 kits being prepared]<br />
<br />
Signing transactions only, requires USB host software for transactions & USB power. Has a OLED display and Confirm/Cancel buttons. Evolved out of someone42's prototype below, and has significant contributions from someone42 as well.<br />
<br clear="all"><br />
=== someone42's original prototype ===<br />
[[File:Someone42-wallet-prototype.jpg|300px|thumb|left|someone42's original prototype]]<br />
[https://bitcointalk.org/index.php?topic=78614.0 Hardware Bitcoin wallet - a minimal Bitcoin wallet for embedded devices]<br />
<br />
Signing transactions only, requires USB host software for transactions & USB power. All work is rolled into the above BitSafe wallet currently.<br />
<br clear="all"><br />
=== BTChip btchip USB based transaction signer and private key holder ===<br />
[[File:Btchip-wallet.jpg|300px|thumb|left|BTChip]]<br />
[https://bitcointalk.org/index.php?topic=134999.0 ANN Smartcard wallet project + btchip implementation (no reader required)]<br />
<br />
[http://www.btchip.com www.btchip.com]<br />
<br />
USB smartcard dedicated to bitcoins, no keypad or display so trust in the host device is required. An improvement has been implemented that uses a secret value known to the user during the transaction for additional security.<br />
<br clear="all"><br />
=== Other/Defunct but with good discussion: ===<br />
* natman3400's BitClip Jun 2011 [https://bitcointalk.org/index.php?topic=24852.0 https://bitcointalk.org/index.php?topic=24852.0]<br />
:Seems to have gone defunct around Dec 2011. Some good ideas though and seemed to have started on execution.<br />
* jim618 hardware wallet proposal Apr 2012 [https://bitcointalk.org/index.php?topic=77553.0 Dedicated bitcoin devices - dealing with untrusted networks]<br />
:Great discussion and good ideas from jim618. Also linked the following video:<br />
* Prof. Clemens Cap's hardware wallet? (video:)[https://www.youtube.com/watch?v=IavQ-Wc8S1U Clemens Cap about electronic bitcoin wallet at EuroBit]<br />
:Clemens Cap of Uni Rostock explains the Electronic Bitcoin wallet device he's working on. It's based on adafruit microtouch device.<br />
* ripper234's discussion based on Yubikeys Aug 2012 [https://bitcointalk.org/index.php?topic=99492 Having a YUBIKEY as one of the parties for m-of-n signatures]<br />
:The use of Yubikeys. They only support symmetric crypto, so you'd have to trust the host device.<br />
* kalleguld's hardware wallet proposal Oct 2012 [https://bitcointalk.org/index.php?topic=115294.0 Proposal: Hardware wallet (Win 3 BTC)]<br />
* Vaporware: Matthew N Wright's ellet [https://bitcointalk.org/index.php?topic=85931.0 ANN The world's first handheld Bitcoin device, the Ellet!] (Vaporware)<br />
<br />
== Smart Card based wallets ==<br />
This type of device requires complete trust in the host device, as there is no method for user input.<br />
See [[Smart card wallet]]<br />
<br />
== Related Resources ==<br />
* slush's Hardware wallet wire protocol discussion: [https://bitcointalk.org/index.php?topic=125383.0 Hardware wallet wire protocol]<br />
* kjj's Todo List discussion for client protocol requirements: [https://bitcointalk.org/index.php?topic=19080.msg272348#msg272348 in topic Re: Split private keys]<br />
* paybitcoin's original post: [https://bitcointalk.org/index.php?topic=134277.0 Hardware Wallet Roundup]<br />
* [https://bitcointalk.org/index.php?topic=135090.0 This thread] about editing this very wiki entry.<br />
* Various Hardware Wallets and Reviews: [http://www.offlinewallets.com/hardware-wallets Offline Hardware Wallets]<br />
<br />
[[Category:Security]]<br />
[[Category:Wallets]]<br />
[[Category:Hardware]]</div>Vwm3nelsonhttps://tests.bitcoin.it/w/index.php?title=Mining&diff=48578Mining2014-07-02T01:45:44Z<p>Vwm3nelson: /* See Also */</p>
<hr />
<div><!-- This page is designed to be short and simple! It should provide only a very brief explanation of things that have their own page and should link to other pages whenever possible. This page should serve as an entry point and a place to organize most of our mining articles. Thank You! (-Atheros) --><br />
[[File:Quick-and-dirty-4x5970-cooling.jpg|thumb|right|A quick and dirty mining rig]]<br />
== Introduction ==<br />
'''Mining''' is the process of adding transaction records to Bitcoin's public ledger of past transactions.<br />
This ledger of past transactions is called the [[block chain]] as it is a chain of [[block|blocks]].<br />
The block chain serves to [[Confirmation|confirm]] transactions to the rest of the network as having taken place.<br />
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.<br />
<br />
Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual [[blocks]] must contain a [[proof of work|proof of work]] to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the [[hashcash]] proof-of-work function.<br />
<br />
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.<br />
Mining is also the mechanism used to introduce Bitcoins into the system:<br />
Miners are paid any transaction fees as well as a "subsidy" of newly created coins.<br />
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.<br />
<br />
Bitcoin mining is so called because it resembles the mining of other commodities:<br />
it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.<br />
<br />
== Difficulty ==<br />
=== The Computationally-Difficult Problem ===<br />
Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the [[Target|target]] in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a [[Nonce|nonce]] is incremented. See [[Proof of work]] for more information.<br />
<br />
=== The Difficulty Metric ===<br />
The [[Difficulty|difficulty]] is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty [[Target|target]] will simply be rejected by everyone on the network and thus will be worthless. <br />
<br />
=== Reward ===<br />
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See [[Controlled Currency Supply]].<br />
<br />
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.<br />
<br />
== The mining ecosystem ==<br />
<br />
=== Hardware ===<br />
[[File:Usb-fpga module 1.15x-hs-800.jpg|thumb|right|FPGA Module]]<br />
Users have used various types of hardware over time to mine blocks. Hardware specifications and performance statistics are detailed on the [[Mining Hardware Comparison]] page.<br />
==== CPU Mining ==== <br />
Early Bitcoin client versions allowed users to use their CPUs to mine. As the network hashrate grew with more power efficient GPU miners the amount of Bitcoin's produced by CPU mining became lower than the cost of power to operate the CPUS. The option still exists in the reference Bitcoin client, but it is disabled by default.<br />
<br />
==== GPU Mining ====<br />
GPU Mining is drastically faster and more efficient than CPU mining. See the main article: [[Why a GPU mines faster than a CPU]]. A variety of popular [[Mining rig|mining rigs]] have been documented.<br />
==== FPGA Mining ====<br />
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See [[Mining Hardware Comparison]] for FPGA hardware specifications and statistics.<br />
==== ASIC Mining ====<br />
An application-specific integrated circuit, or ''ASIC'', is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already has made GPU mining financially unwise in some countries and setups.<br />
<br />
==== Mining services (Cloud mining) ====<br />
[[:Category:Mining_contractors|Mining contractors]] provide mining services with performance specified by contract. They may, for example, rent out a specific level of mining capacity for a set price for a specific duration.<br />
<br />
Mining shares provide Mining as a Service (MaaS). These break large-scale datacenter mining down to easily manageable pieces that are available in the form of shares of equipment.<br />
<br />
Hosted mining services create some systemic risk for the Bitcoin system because they undermine the security assumption that the control of mining power is well distributed. If too much mining becomes consolidated in large hosting providers and an attacker is able to compromise some of these providers they could potentially disrupt the Bitcoin system or rip off people they transact with with reversals.<br />
<br />
=== Pools ===<br />
As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into [[Pooled mining|pools]] so that they could share rewards more evenly. See [[Pooled mining]] and [[Comparison of mining pools]].<br />
<br />
=== History ===<br />
Bitcoin's public ledger (the 'block chain') was started on January 3rd, 2009 at 18:15 UTC presumably by [[Satoshi Nakamoto]]. The first block is known as the [[genesis block]]. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.<br />
<br />
==See Also==<br />
<br />
* [http://BitcoinMiner.net Comprehensive Guide Bitcoin Miner and Mining]<br />
* [http://codinginmysleep.com/bitcoin-mining-in-plain-english Bitcoin Mining in Plain English] by David Perry<br />
* [[Automatically mine when computer is locked|Tutorial to automatically start mining when you lock your computer]]. (Windows 7)<br />
* [http://www.reddit.com/r/Bitcoin/comments/18q2jx/eli5_bitcoin_mining_xpost_in_eli5/ Simplified Explanation of Bitcoin Mining] by reddit user [http://www.reddit.com/user/azotic azotic]<br />
* [http://www.vnbitcoin.org/bitcoincalculator.php Bitcoin Mining Calculator]<br />
* [http://www.MiningContracts.com Research, Review and Compare Cloud Mining Contracts]<br />
[[ru:Mining]]<br />
[[Category:Mining]][[Category:Vocabulary]]</div>Vwm3nelsonhttps://tests.bitcoin.it/w/index.php?title=Mining&diff=48575Mining2014-07-02T00:33:15Z<p>Vwm3nelson: /* See Also */</p>
<hr />
<div><!-- This page is designed to be short and simple! It should provide only a very brief explanation of things that have their own page and should link to other pages whenever possible. This page should serve as an entry point and a place to organize most of our mining articles. Thank You! (-Atheros) --><br />
[[File:Quick-and-dirty-4x5970-cooling.jpg|thumb|right|A quick and dirty mining rig]]<br />
== Introduction ==<br />
'''Mining''' is the process of adding transaction records to Bitcoin's public ledger of past transactions.<br />
This ledger of past transactions is called the [[block chain]] as it is a chain of [[block|blocks]].<br />
The block chain serves to [[Confirmation|confirm]] transactions to the rest of the network as having taken place.<br />
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.<br />
<br />
Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual [[blocks]] must contain a [[proof of work|proof of work]] to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the [[hashcash]] proof-of-work function.<br />
<br />
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.<br />
Mining is also the mechanism used to introduce Bitcoins into the system:<br />
Miners are paid any transaction fees as well as a "subsidy" of newly created coins.<br />
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.<br />
<br />
Bitcoin mining is so called because it resembles the mining of other commodities:<br />
it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.<br />
<br />
== Difficulty ==<br />
=== The Computationally-Difficult Problem ===<br />
Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the [[Target|target]] in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a [[Nonce|nonce]] is incremented. See [[Proof of work]] for more information.<br />
<br />
=== The Difficulty Metric ===<br />
The [[Difficulty|difficulty]] is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty [[Target|target]] will simply be rejected by everyone on the network and thus will be worthless. <br />
<br />
=== Reward ===<br />
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See [[Controlled Currency Supply]].<br />
<br />
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.<br />
<br />
== The mining ecosystem ==<br />
<br />
=== Hardware ===<br />
[[File:Usb-fpga module 1.15x-hs-800.jpg|thumb|right|FPGA Module]]<br />
Users have used various types of hardware over time to mine blocks. Hardware specifications and performance statistics are detailed on the [[Mining Hardware Comparison]] page.<br />
==== CPU Mining ==== <br />
Early Bitcoin client versions allowed users to use their CPUs to mine. As the network hashrate grew with more power efficient GPU miners the amount of Bitcoin's produced by CPU mining became lower than the cost of power to operate the CPUS. The option still exists in the reference Bitcoin client, but it is disabled by default.<br />
<br />
==== GPU Mining ====<br />
GPU Mining is drastically faster and more efficient than CPU mining. See the main article: [[Why a GPU mines faster than a CPU]]. A variety of popular [[Mining rig|mining rigs]] have been documented.<br />
==== FPGA Mining ====<br />
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See [[Mining Hardware Comparison]] for FPGA hardware specifications and statistics.<br />
==== ASIC Mining ====<br />
An application-specific integrated circuit, or ''ASIC'', is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already has made GPU mining financially unwise in some countries and setups.<br />
<br />
==== Mining services (Cloud mining) ====<br />
[[:Category:Mining_contractors|Mining contractors]] provide mining services with performance specified by contract. They may, for example, rent out a specific level of mining capacity for a set price for a specific duration.<br />
<br />
Mining shares provide Mining as a Service (MaaS). These break large-scale datacenter mining down to easily manageable pieces that are available in the form of shares of equipment.<br />
<br />
Hosted mining services create some systemic risk for the Bitcoin system because they undermine the security assumption that the control of mining power is well distributed. If too much mining becomes consolidated in large hosting providers and an attacker is able to compromise some of these providers they could potentially disrupt the Bitcoin system or rip off people they transact with with reversals.<br />
<br />
=== Pools ===<br />
As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into [[Pooled mining|pools]] so that they could share rewards more evenly. See [[Pooled mining]] and [[Comparison of mining pools]].<br />
<br />
=== History ===<br />
Bitcoin's public ledger (the 'block chain') was started on January 3rd, 2009 at 18:15 UTC presumably by [[Satoshi Nakamoto]]. The first block is known as the [[genesis block]]. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.<br />
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==See Also==<br />
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* [http://BitcoinMiner.net Comprehensive Guide Bitcoin Miner and Mining]<br />
* [http://codinginmysleep.com/bitcoin-mining-in-plain-english Bitcoin Mining in Plain English] by David Perry<br />
* [[Automatically mine when computer is locked|Tutorial to automatically start mining when you lock your computer]]. (Windows 7)<br />
* [http://www.reddit.com/r/Bitcoin/comments/18q2jx/eli5_bitcoin_mining_xpost_in_eli5/ Simplified Explanation of Bitcoin Mining] by reddit user [http://www.reddit.com/user/azotic azotic]<br />
* [http://www.vnbitcoin.org/bitcoincalculator.php Bitcoin Mining Calculator]<br />
* [http://MiningContracts.com Research, Review and Compare Cloud Mining Contracts]<br />
[[ru:Mining]]<br />
[[Category:Mining]][[Category:Vocabulary]]</div>Vwm3nelson