What is Bitcoin Mining? Bitcoin Mining Hardware Comparison

Bitcoin Mining Hardware Comparison

Currently, based on (1) price per hash and (2) electrical efficiency the best Bitcoin miner options are:

AntRouter R1

AntRouter R1 Bitcoin Miner
5.5 Gh/s
50W
1.0 pounds
Yes
$59.95

Antminer S9

Antminer S9 Bitcoin Miner
13.5 Th/s
0.1 J/GH
16 pounds
Yes
$2,264.51

BPMC Red Fury USB

BPMC Red Fury USB Miner
2.5 GH/s
1.00 W/GH
1.6 ounces
Yes
$23.87

What is Bitcoin mining?

Bitcoin as one big global ledger system that records transactions (or ‘moving money’) from one person to another. Whenever Bitcoin transactions are processed on the Bitcoin network – that means Bitcoin being moved from one person to another – someone has to make sure all the transactions are recorded properly and that the ledgers on all the systems are synchronized all over the world.

In the case of Bitcoin, this process is not done by people or companies, but by thousands of computers all over the world that are all connected to the internet. These computers are knowns as ‘miners’, but they should really simply be called ‘computers that process transactions’.

To do this processing in a very secure way, these computers need to perform very complicated calculations that take a lot of computing power, and in turn, require a lot of energy and expensive and specialised processing equipment. Someone - the owner of the computers - needs to pay for all this equipment and electricity, so they need to be compensated for all the money and effort they are putting into making this network work. They earn this compensation through newly minted Bitcoin - so in short all new Bitcoin that is created acts as a reward and incentive mechanism for people to contribute their computers to the system to help process transactions.

Another way to look at it is to consider what would happen if a large bank built the world’s biggest global transaction processing system: they would spend a few billion dollar on it and then charge everyone transaction fees to recoup this cost. With Bitcoin mining, the cost of this global system has just been spread over thousands of computers, and they recoup their cost through newly minted Bitcoin. In short, it’s simply a democratisation of financial infrastructure.

During mining, your Bitcoin mining:
During mining, your Bitcoin mining hardware runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header. For each new hash that is tried, the mining software will use a different number as the random element of the block header, this number is called the nonce. Depending on the nonce and what else is in the block the hashing function will yield a hash which looks something like this:

93ef6f358fbb998c60802496863052290d4c63735b7fe5bdaac821de96a53a9a
You can look at this hash as a really long number. (It's a hexadecimal number, meaning the letters A-F are the digits 10-15.) To ensure that blocks are found roughly every ten minutes, there is what's called a difficulty target. To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is

1000000000000000000000000000000000000000000000000000000000000000
any number that starts with a zero would be below the target, e.g.:

0787a6fd6e0782f7f8058fbef45f5c17fe89086ad4e78a1520d06505acb4522f
If we lower the target to

0100000000000000000000000000000000000000000000000000000000000000
we now need two zeros in the beginning to be under it:

00db27957bd0ba06a5af9e6c81226d74312a7028cf9a08fa125e49f15cae4979
Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty. The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi Nakamoto had to do generating the first block. To be fair, back then mining hardware and algorithms were a lot slower and less optimized.

To keep blocks coming roughly every 10 minutes, the difficulty is adjusted using a shared formula every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That's why, when the network power rises, the difficulty rises as well.

Bitcoin Mining Hardware

At first, miners used their central processing unit (CPU) to mine, but soon this wasn't fast enough and it bogged down the system resources of the host computer. Miners quickly moved on to using the graphical processing unit (GPU) in computer graphics cards because they were able to hash data 50 to 100 times faster and consumed much less power per unit of work.

During the winter of 2011, a new industry sprang up with custom equipment that pushed the performance standards even higher. The first wave of these specialty bitcoin mining devices were easy to use Bitcoin miners were based on field-programmable gate array (FPGA) processors and attached to computers using a convenient USB connection.

FPGA miners used much less power than CPU's or GPU's and made concentrated mining farms possible for the first time.

Bitcoin Mining Softwares:

BTCMiner

This Bitcoin miner is an Open Source for ZTEX USB-FGPA modules 1.5. The following features are : there's a flexibility on chosing the highest rate of frequency in valid hashes, integrated with Bitstream example - Xilinx software or required with license.

The miner also has FPGA board supports that has USB interface in it for programming and communication usage.

CGMiner

Upon writing this page, it is aguably the most common and the most popular Bitcoin mining software used by miners. CPU Miner is the original code for this miner.

It has a lot of features which specifically : control on fan speed, capabilities for remote interface, using mini database - it can detect new blocks easily, supports with multi GPU, and supports CPU Mining.

BFGMiner

It is almost the same features with CGMiner. Unlike CGMiner, BGFMiner doesn't focused on GPUs which turns out to be their big difference on features.

It has unique capabilities also like : LLVM OpenCL/mesa mining, PCI bus ID reorderring ADL device, can be integrated for overclocking and fan control.

Bitcoin Cloud Mining

HashFlare:
HashFlare.io offers cryptocurrency cloud mining services on modern, high-efficiency equipment. ... BitCoin Cloud Mining ... Scrypt Cloud Mining; Scrypt algorithm miner; Minimum Hashrate: 1 MH/s; Maintenance fee: 0.01 $ / 1 MH/s / 24h

Genesis Mining:
Bitcoin is the currency of the future & Genesis Mining is the largest cloud mining company on the market. Mine bitcoin through the cloud, get started today

Eobot:
Cloud mining and Bitcoin mining made easy. Eobot is the easiest, cheapest, and best way to get or mine Bitcoin, Ethereum, Litecoin, STEEM, Dogecoin, Ripple.

Bitcoin Mining Difficulty
Difficulty is a measure of how difficult it is to find a hash below a given target.

The Bitcoin network has a global block difficulty. Valid blocks must have a hash below this target. Mining pools also have a pool-specific share difficulty setting a lower limit for shares.