The most experienced miners remember the times when a farm with six Nvidia video cards brought 1 ETH per day. That was the time right before the 2017 boom when home miners earned small fortunes if funds were distributed correctly and on time. At that time, as they say, the sun never set over the empire of miners.
In 2017, when cryptocurrency quotations were constantly growing, and every morning the Ripple holders started with enthusiastic swear words, many installed farms in the storeroom, garage, or right in the bedroom. The hash-rate in the Bitcoin network was growing, and manufacturers of equipment for the extraction of cryptocurrencies released more and more new products, selling spades during the gold rush.
The collapse of the market, which occurred in 2018, primarily affected medium and large miners who need to go to Fiat partially to cover the costs of servicing / replacing equipment, paying for electricity and staff, and in some cases renting premises.
Thus, according to some market participants, it was the miners who became the driving force behind the bear market, abandoning the HODL strategy in favor of hedging risks by opening short positions.
In late November, after the stronghold of resistance at the level of $ 6000 fell, a real panic began among the miners. Tens of thousands of ASIC devices were disabled, and the bitcoin hash rate fell sharply to the values of May 2018. Then the complexity of mining Bitcoin has undergone the second largest decline in history, having sunk by 15.13%.
In addition, reports began to appear in the media that the Ethereum GPU mining, which is extremely popular among home miners, stopped making any profit, and the “death spiral” phrases began to appear more and more often in mainstream media and Twitter headlines.
However, the year 2019 has come, and Bitcoin is still alive, the hash-rate is still huge, the miners are still mining, and the traders are still trading.
The process of Bitcoin mining essentially means adding new transactions to Blockchain, BTC public ledger. The major features of Bitcoin are openness and transparency, so everyone can access it. All transaction, added to Blockchain, are confirmed. Moreover, this innovative technology is used to filter legitimate transactions from illegal actions (for example, re-spending funds).
You can obtain BTC through:
1)Buying Bitcoin on a cryptocurrency exchange, Bitcoin ATMs, Bitcoin gift cards, P2P, etc. (you can read more about it in our new article);
2) Accepting BTC for services, products, goods, clothes, etc. Some innovative services also pay salaries in Bitcoin or other cryptocurrency.
3) Bitcoin mines, which is carried out by bitcoin mining software.
Bitcoin block reward
Miners play a very important role in the Bitcoin community: they prove all transactions and check if they are legitimate. However, miners are competitors, not friends. They keep a track on the best mining software and hardware, which are designed to mine fast and effectively. As soon as a block is stamped and a miner developed an exact hash order, he / she gets a reward.
The world-famous provider of video cards Advanced Micro Devices (AMD) intends to increase the production of its devices and thereby eliminate their shortage in the market.
According to AMD CEO Lisa Su, the current lack of the graphic cards on the market is largely due to the inadequate production of GDDR5 and HBM2 memory used in the RX line popular among miners. As noted in AMD, investors and consumers have no reason to be concerned, as the company and its partners will continue to take measures to overcome the deficit.
During the conversation with the investors, the head of the company presented the annual report on AMD financial results, noting that the cryptocurrency mining became an important driver of the company’s revenue growth.
It is not a secret that the total number of BTC is limited to 21 000 000 USD.
Bitcoins mining in China
2018 began with the collapse of cryptocurrency miners from China, where they were pressured by local authorities. Bitmain, the largest manufacturer of mining equipment, first opened its headquarters in Singapore and then expanded its presence in Canada and the United States.
At the same time, the BTC.top pool opened a division in Canada, and ViaBTC opened a pool in Iceland and the USA.
Already in the spring, it became known that the authorities of Walla Walla County of the US state of Washington approved the transfer of land [10 acres] for rent with the possibility of subsequent purchase by the [Ant Creek] division of the leading Chinese manufacturer of mining equipment Bitmain.
In addition, the Chinese giant opened a service center in Irkutsk, thereby reducing the costs of Russian miners when sending devices for warranty service.
In the summer, Bitmain’s office appeared in San Jose, the capital of Silicon Valley. Then the company was already actively engaged in attracting venture capital investments on the eve of the IPO on the Hong Kong Stock Exchange (HKEX).