Bitcoin is officially ten years old. On this day ten years ago, Bitcoin’s elusive creator Satoshi Nakamoto mined the first Bitcoin block. Known as the “genesis block” or Block#0, it marks the very start of the Bitcoin blockchain.
A decade later, there are now more than half a million blocks on the Bitcoin blockchain. And the price of one bitcoin has soared from almost zero to $3,900.
The block contains just one transaction: the 50 BTC reward for mining it.
The block also contains a pointed message about the existing banking system with a message written into the code:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
The message refers to the headline in The Times newspaper on that day. You could argue it’s a simple time stamp. However, it’s more likely a comment on the failing banking system. British Chancellor Alistair Darling was considering a bailout for the banks after the financial crisis in 2008.
It’s no coincidence that Satoshi included this message as he ushered in a radical new monetary system of his own.
Satoshi was rewarded with 50 bitcoins for mining the first block. However, due to the way the bitcoin blockchain is coded, the reward for the first block cannot be spent. Over time, people have donated additional BTC to the block.
Even today, the Genesis block received a gift from the following address:
To celebrate the anniversary, crypto exchange BitMex took out an advert on the front page of The Times. It reads: “Thanks Satoshi. We owe you one. Happy 10th Birthday, Bitcoin.”
It’s a subtle nod to Satoshi’s hidden message on the genesis block which referenced The Times newspaper headline.
Gaming company Razer has announced a new app enabling users to mine cryptocurrency with their gaming PC.
The app, named Razer SoftMiner, puts your gaming rig to work once you’ve stopped gaming, utilizing the idle GPU processing power. SoftMiner is still in beta but currently supports 5,000 users per week.
But there’s a catch. Rather than being rewarded with cryptocurrency directly, you’ll earn Razer Silver, a “rewards currency.” Razer Silver can be redeemed for gift vouchers, games, and discounts off Razer products.
Razer claims that users can earn up to 500 Razer Silver per day.
How does it work?
The SoftMiner app is powered by GammaNow’s computer engine. It runs silently in the background, solving complex blockchain puzzles and contributing to the mining network.
The amount of Razer Silver you earn corresponds to how much processing power is devoted to mining and how long you leave it running.
You can download and install the app via the Razer Central portal, accessible here. Razer recommends you have a GPU of at least a Nvidia GTX 1050 or AMD RX 460.
How else can I mine cryptocurrency with a gaming PC?
Earlier this year, Asus launched a mining motherboard, which plugs directly into your PCB and supports 20 graphics cards.
If you’d rather not splash out on a full motherboard, Asus has also collaborated with Quantumcloud to help gamers put their idle GPU to use. The Quantumcloud software handles the tricky aspects, like setting up a wallet and mining platform. Users are paid via PayPal or Wechat.
What about mining directly? If your PC is sufficiently powerful, you can download mining software like ethminer or Claymore and put your computer to work. However, you’ll probably want to join a mining pool (a collective of miners who contribute processing power and share the cryptocurrency rewards). Mining pools include AntPool, Slush, Ethermine, and BTC.com.
Proof of Work is the algorithm that powers various blockchains, like Bitcoin, Ethereum, Litecoin, and Monero.
Miners solve complex mathematical puzzles using computer power to produce a “block” of transactions.
When a block is produced, the miner is rewarded with the native cryptocurrency: bitcoin, ether, or litecoin, for example.
Proof of work ensures that blocks are produced at a stable rate and are accurately verified.
Cryptocurrencies work on the principle of a blockchain, where blocks containing transactions are added to the chain to make transactions happen.
The issue is, the speed and validity of blocks must be kept in check. Proof of Work solves this issue, let’s check out how.
Blocks on the blockchain are quite powerful as they confirm the transaction of money between addresses. They also distribute new currency by issuing rewards to the block creator.
For these reasons, there are two important rules for block production.
Blocks need to be verified some way, so that we know what order transactions happened, among other things.
We need to control the speed at which blocks are added. If the speed is not controlled, block rewards are added to the network quickly and the worth of the currency plummets.
Bitcoin, for example, has a target block time of ten minutes. If blocks are created too fast, too much bitcoin will be given out to miners, thus flooding the market. Something has to keep that block time regulated.
Enter Proof Of Work
Proof of work solves both of our issues. It’s based on the idea that we include some data in the block that is hard to calculate, but easy to verify.
Hash algorithms are perfect for our verification problem but don’t fix the issue of timing on their own.
Hashes are designed to be fast to compute, very fast in fact. The time it took to calculate the above two hashes was less than one-hundredth of a second.
But we need to regulate the time, so blocks aren’t produced too quickly.
We have a simple solution to this: network difficulty.
Simply put, you can change how long it takes to create a block by making it harder to solve the cryptographic puzzle.
Usually, that means including a constraint that the hash must be below a specific number. And that that number is calculated at specific intervals.
Now miners have to hash their blocks many times, with each one taking up some time and lots of computer power. In order for the block creator to change the hash of their block, an additional bit of information is added to the block called thenonce.
A nonce is simply a number that can be modified as the block creator sees fit to change the output hash.
Each time a hash is calculated and does not meet the requirements of the network at that time, the nonce is incremented or otherwise changed and the hash re-calculated.
Often a miner will try a very large number of different nonces before they find one that will be accepted by the network. The total time all miners take to find a block should be somewhere around the block time (ten minutes for Bitcoin).
And if not, the difficulty is adjusted to keep the timing in line.
Not all Proof of Work Algorithms are the Same…
The hashing algorithm a cryptocurrency uses directly affects how difficulty will work, and what hardware you can run the mining software on.
To use Bitcoin as an example again; Bitcoin uses the algorithm SHA-256, which is an industry standard hashing algorithm used in many places.
If you’ve saved a password on a website, odds are it was hashed with Secure Hash Algorithm (SHA)-256 before it was stored. Using industry standard hashing algorithms means they are proven secure and worked on by massive communities.
However, using industry-standard algorithms is both a blessing and a curse.
A blessing because most hardware will be able to run your software. But a curse (depending on how you look at it) due to one word: ASICs.
ASIC (Application Specific Integrated Circuits) are mining hardware that gives your network a massive amount of mining power. That increases centralization due to price and power demands. The more ASICs you own or control, the more of the network you command.
Some other cryptocurrencies, like Monero, use their own hashing algorithm specifically designed for use in proof of work systems. These have the advantage that developers have complete control over what hardware the algorithm works on best.
Downsides to Proof of Work
There are a few downsides to Proof of Work when compared to other solutions.
First, Proof of Work requires a lot of computing power. And, the more mining power on the network, the higher the difficulty. Meaning that you very quickly run into a situation where those with the cash to buy hardware do. And when you have a lot of hardware, you tend to store all their hardware in one place, leading to centralization.
At worst, this could lead to a 51% attack, whereby one actor, or group of actors, control more than half of the network. If that happens, they could theoretically “double spend” the cryptocurrency on the network.
And second, that computing power needs a lot of electricity to run, and at the high end, miners go looking for the cheapest power possible. This means that miners start to congregate in cities or countries where the power is cheap, again leading to centralization.
Use our news to inform cryptocurrency trading decisions, stay up-to-date on happenings in the industry, and more!
Wells Fargo Is The Latest Bank To Block Cryptocurrency Purchases On Credit
You can’t buy bitcoin with Wells Fargo credit cards anymore. Engadget reports, “Wells Fargo is pumping the brakes on customers using their credit cards to buy bitcoin — the bank has banned credit card cryptocurrency purchases. However, this isn’t a permanent measure, as Wells Fargo will monitor the crypto market and reassess the issue as needed”.
SEC Launches ICO Portal: Highlights Risks, Rewards, and Responsibilities
According to Tony Spilotro of BlockExplorer, “The United States Securities and Exchange Commission (SEC) is vehemently opposed to a common crowdfunding practice in the cryptocurrency industry called the initial coin offering (ICO). An ICO is similar to an initial public offering where a company or corporation raises investment capital by offering its stock to the public for the first time. Only in an ICO, a digital currency or token is distributed instead of a stock, and the token can have a variety of uses that blur the line of what defines a traditional security.”
Hackers Steal $20 Million Of Ethereum From Ethereum-based Apps and Mining Rigs
The Chinese cyber-security firm Qihoo 360 Netlab reported hackers stole over $20 million of Ethereum. BleepingComputer tells us, “The cause of these thefts is Ethereum software applications that have been configured to expose an RPC [Remote Procedure Call] interface on port 8545. The purpose of this interface is to provide access to a programmatic API that an approved third-party service or app can query and interact or retrieve data from the original Ethereum-based service —such as a mineror wallet application that users or companies have set up for mining or managing funds.”
Argo Blockchain to List on London Stock Exchange, Launches Subscription Crypto-mining
Argo Blockchain, a business that seeks to offer cryptocurrency-mining to the masses, announced its plans to list its shares on the London Stock Exchange. BlockExplorer’s Julia Travers shares with us that “the announcement coincided with the launch of Argo’s Mining as a Service, or MaaS, program, which will allow users to participate in mining through the Argo site with their home computers or smartphones.”
Argo Blockchain, a business that seeks to offer cryptocurrency-mining to the masses, announced its plans to list its shares on the London Stock Exchange or LSE on June 11, 2018. This announcement coincided with the launch of Argo’s Mining as a Service, or MaaS, program, which will allow users to participate in mining through the Argo site with their home computers or smartphones. According to the announcements, Argo expects its valuation to be £40 million, or about $54 million, and to raise £20 million, or about $27 million. Argo plans to use the money raises to fund the growth if its MaaS services. Co-founder Jonathan Bixby said:
We have launched this service to take the pain and heartache out of participating in the biggest new technology breakthrough since the launch of the internet.
Argo aims to be the first crypto-mining company on the LSE. In 2015, blockchain-focused investment business Coinsilium was the first cryptocurrency-related company to hold an IPO on LSE’s submarket for smaller companies, AIM.
Argo was established in 2017. According to the company announcements, its technology invites the public at large to become crypto-miners, “without the need to have significant computing expertise or acquire complex and expensive hardware and have the frustration of setting up their own systems.”
Argo compares its mainstream mining services to the cloud computing revolution of the last decade, and Bixby toldThe Financial Times it wants to be “the Amazon web services of crypto.” Subscribers to Argo’s cloud-based platform sign up for a specific amount of mining capacity and can choose what to mine, which mining pool to join and where to store their coins off the site. Introductory fees to join its pools are £18 or about $25 per month. Currently, it mines the digital currencies Bitcoin Gold, Ethereum, Ethereum Classic and Zcash, but this may change in the future.
Argo is headquartered in London and has a mining facility in Quebec. It currently has 7 racks, each holding 10 servers with 8 GPUs each in Canada, and it has also started “initial operations” in China. Argo’s primary targets customers are in Europe, North America and Australia. The company plans to rely on renewable energy like solar and hydropower.
Bixby describes the company’s plan to go public in this way:
A London stock market listing will provide Argo with the profile, credibility and access to global capital to drive our growth and help us establish a leadership position in the long term.
The featured image is the Argo logo, credit: Argo.