Ethereum: GPU Mining Is Back But For How Long?

By now, everyone and their dog has at least heard of Bitcoin. While no government will accept tax payments in Bitcoin just yet, it’s ridiculously close to being real money. We’ve even paid for pizza delivery in Bitcoin. But it’s not the only cryptocurrency in town.

Ethereum initially launched in 2015 is an open source, it has been making headway among the 900 or so Bitcoin clones and is the number two cryptocurrency in the world, with only Bitcoin beating it in value. This year alone, the Ether has risen in value by around 4000%, and at time of writing is worth $375 per coin. And while the Bitcoin world is dominated by professional, purpose-built mining rigs, there is still room in the Ethereum ecosystem for the little guy or gal.

Ethereum is for Hackers

There may be many factors behind Ethereum’s popularity, however one reason is that the algorithm is designed to be resistant to ASIC mining. Unlike Bitcoin, anyone with a half decent graphics card or decent gaming rig can mine Ether, giving them the chance to make some digital currency. This is largely because mining Ethereum coins requires lots of high-speed memory, which ASICs lack. The algorithm also has built-in ASIC detection and will refuse to mine properly on them.

Small-scale Bitcoin miners were stung when the mining technology jumped from GPU to ASICs. ASIC-based miners simply outperformed the home gamer, and individuals suddenly discovered that their rigs were not worth much since there was a stampede of people trying to sell off their high-end GPU’s all at once. Some would go on to buy or build an ASIC but the vast majority just stopped mining. They were out of the game they couldn’t compete with ASICs and be profitable since mining in its self uses huge amounts of electricity.

Economies of scale like those in Bitcoin mining tend to favor a small number of very large players, which is in tension with the distributed nature of cryptocurrencies which relies on consensus to validate transactions. It’s much easier to imagine that a small number of large players would collude to manipulate the currency, for instance. Ethereum on the other hand hopes to keep their miners GPU-based to avoid huge mining farms and give the average Joe a chance at scoring big and discovering a coin on their own computer.

Ethereum Matters

Ethereum’s rise to popularity has basically undone Bitcoin’s move to ASICs, at least in the gamer and graphics card markets. Suddenly, used high-end graphics cards are worth something again. And there are effects in new equipment market. For instance, AMD cards seem to outperform other cards at the moment and they are taking advantage of this with their release of Mining specific GPU drivers for their new Vega architecture. Indeed, even though AMD bundled its hottest RX Vega 64 GPU with two games, a motherboard, and a CPU in an attempt to make the package more appealing to gamers than miners, AMD’s Radeon RX Vega 56 sold out in five minutes with Ethereum miners being blamed.

Besides creating ripples in the market for high-end gaming computers, cryptocurrencies are probably going to be relevant in the broader economy, and Ethereum is number two for now. In a world where even banks are starting to take out patents on blockchain technology in an attempt to get in on the action, cryptocurrencies aren’t as much of a fringe pursuit as they were a few years ago. Ethereum’s ASIC resistance is perhaps its killer feature, preventing centralization of control and keeping the little hacker in the mining game. Only time will tell if it’s going to be a Bitcoin contender, but it’s certainly worth keeping your eye on.

World’s Worst Bitcoin Mining Rig

Even if we don’t quite understand what’s happening in a Bitcoin mine, we all pretty much know what’s needed to set one up. Racks of GPUs and specialized software will eventually find a few of these vanishingly rare virtual treasures, but if you have enough time, even a Xerox Alto from 1973 can be turned into a Bitcoin mine. As for how much time it’ll take [Ken Shirriff]’s rig to find a Bitcoin, let’s just say that his Alto would need to survive the heat death of the universe. About 5000 times. And it would take the electricity generated by a small country to do it.

Even though it’s not exactly a profit center, it gives [Ken] a chance to show off his lovingly restored Alto. The Xerox machine is the granddaddy of all modern PCs, having introduced almost every aspect of the GUI world we live in. But with a processor built from discrete TTL chips and an instruction set that doesn’t even have logical OR or XOR functions, the machine isn’t exactly optimized for SHA-256 hashing. The fact that [Ken] was able to implement a mining algorithm at all is impressive, and his explanation of how Bitcoin mining is done is quite clear and a great primer for cryptocurrency newbies.

[Ken] seems to enjoy sending old computer hardware to the Bitcoin mines — he made an old IBM mainframe perform the trick a while back. But if you don’t have a room-size computer around, perhaps reading up on alternate uses for the block chain would be a good idea.

[via Dangerous Prototypes]

Applications for the Bitcoin Blockchain

Bitcoin, the libertarian’s dream currency, is far past the heady days of late 2013. When one Bitcoin was worth $1000 USD, there was no end to what could be done; new, gigantic mining rigs were being created, every online store jumped onto the bandwagon, and the price of Bitcoin inevitably crashed. Right now, the exchange rate sits at about $280 USD per coin, valuing all the Bitcoins ever mined somewhere around $4 Billion USD. That’s a lot of coins out there, and a lot of miners constantly verifying the integrity of the greatest thing to come from the Bitcoin community: the blockchain.

The bitcoin is just a record, or the ledger, of every transaction that has ever occurred on the Bitcoin network. It’s distributed, and the act of mining coins creates new blocks, or another set of data committed to the blockchain for eternity. While magical Internet money™ is by far the most visible product of the blockchain, developers, investors, and other people in the know are gushing about the possibilities of what can be done with a distributed record that can’t practically be altered and can’t be deleted.

[Jon Matonis], a figurehead for the entire cryptocurrency movement, recently said Bitcoin has become the strongest computer in the world, and stronger than all of the top 500 supercomputers combined. All of this computational power is effectively funneled in to verifying the integrity of the blockchain.

Bitcoin and other cryptocurrencies are not just a completely anonymous payment system; that’s only a side effect of the blockchain. The blockchain is the only inherently valuable part of a bitcoin; each transaction is logged in the blockchain, providing incredible security over how every coin is spent. No currency in the history of mankind has ever had a record of how every dollar or denarius is spent, and at the very least makes for very interesting economics research. Now, thousands of researchers across the globe are wondering what else the blockchain can do; tapping the power of the most powerful computer on the planet must have some interesting applications, and in the last few months, a few ideas have popped up.

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Hackaday wants all your Bitcoin

Bitcoin, the solution to the two generals’ problem, an economic case study in the history of currency, and the reason AMD graphics cards were so expensive a few years ago, is now accepted in The Hackaday Store.

Yes, we have a store, loaded up with swag, tools, and cool toys. We’re always stocking more  If you have coin sitting around, you can pick up a great little logic analyzer, a 3D printer, an ingenius two channel multimeter, ESP8266 boards, the ever popular Hackaday swag and a ton more. That 3D printer will cost you ฿ 3.75. A Mooshimeter is just ฿ 0.50.

It’s the perfect time to turn magical Internet money into something with real, intrinsic value, before the value of Bitcoin drops even more. Sure, we accept government-backed currency as well… but when will you have the chance to spend those hard-mined dollars hashes?

Open Bitcoin ATM

openBitcoinAtm

If there’s one thing Bitcoins can benefit from, it’s easier accessibility for first-time users. The process can be a bit daunting if you’re new to cryptocurrency, but [mayosmith] is developing an open Bitcoin ATM to help get coins in the hands of the masses. There are already some Bitcoin dispensers out there. The Lamassu is around 5k a pop, and then there’s always the option of low-tech Condom Vending Machine conversions.

[mayosmith’s] build is still in the proof-of-concept phase, but has some powerful functionality underway. The box is made from acrylic with a front plate of 12″x12″ aluminum sheet metal, held on by 2 aluminum angles and some bolts. Slots were carved out of the aluminum sheet for the thermal printer and for bill acceptor—the comments identify it as an Apex 7000. Inside is an Arduino with an SD Shield attached. Dollars inserted into the acceptor trigger the Arduino to spit out a previously-generated QR code for some coins via the thermal printer, though all values are pre-determined at the time of creation and stored sequentially on the SD card. Stick around for a quick video below, and check out the official page for more information: http://openbitcoinatm.org

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Wow. Such Mining Rig. So Amaze.

After hearing about cryptocurrencies like Bitcoin, Litecoin, and Dogecoin, [Eric] decided he would have a go at designing his own mining rig. The goals of the project were to have a self-contained and stackable mining rig that had all the parts easily accessible. The result is this awesome computer enclosure, where GPU mining and traditional woodworking collide.

For mining all those coins, [Eric] is using five R9 280x GPUs. That’s an impressive amount of processing power that ended up being too much for the 1500W power supply he initially planned to use. With a few tweaks, though, he’s managing about 2.8 Mh/s out of his rig, earning him enough dogecoins to take him to the moon.

In the video below, you can see [Eric] building his rig out of 4×8 framing lumber. This isn’t a slipshod enclosure; [Eric] built this thing correctly by running the boards through a jointer, doing proper box joints with this screw and gear-based jig, and other proper woodworking techniques we don’t usually see.

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Manual Bitcoin Transactions

bitcoin

For something that’s used for such banal transactions like buying drugs and sending the Jamaican bobsled team to the Olympics, cryptocurrencies such as Bitcoin are actually very impressive pieces of software. It’s a very ingenious solution to the Two Generals Problem, and the fact it made a few Bitcoin early adopters very, very rich doesn’t hurt either. [Ken Shirriff] decided to take a look at the Bitcoin protocol by creating a Bitcoin address and transferring a small amount of bitcoin to that address, manually. It’s a great look at how the Bitcoin protocol actually works, and how ingenious this protocol actually is.

[Ken]’s first task was to create a Bitcoin address. This is a 256-bit private key is the basis for the Bitcoin wallet private key (after being encoded as ASCII characters), and as the 512-bit public key (after being sent through an elliptic curve algorithm). The 512-bit public key is then hashed with SHA-256 and RIPEM 160 to generate the 160-bit public key hash and the Bitcoin address.

After creating a bitcoin address and wallet, [Ken] set out on manually creating a transaction. The idea was to buy a few cents (USD) from Coinbase and send them to his manually created address. This involved creating a transaction according to the Bitcoin spec and signing the transaction. Signing each Bitcoin transaction is the key to Bitcoin’s security, and is done with a small bit of code written in the Bitcoin scripting language.

With everything written in Python, [Ken] was ready to send his transaction off into the Bitcoin network. This was done by finding a few peers on the Bitcoin network and sending off a few packets. After a little bit of mining on the network, [Ken]’s transaction went through, confirmed by a deposit into his Bitcoin wallet.

It’s an awesome writeup and impressive achievement to manually send a few Bitcoins from one wallet to another. More impressively, [Ken] provided some amazing insight into how the Bitcoin protocol works, and how much work went into its creation.