How Did Bitcoin Mining Start?

By March 23, 2015Bitcoin Business
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How Did Bitcoin Mining Start?

Prior to the market hype on bitcoin mining a few years back, not a lot of people paid attention to the cryptocurrency and its related technology. It was fairly easy to mine bitcoins back then and the equipment needed to generate the digital currency wasn’t as expensive as it is these days.

In fact, only a standard computer CPU (central processing unit) can be enough for bitcoin mining operations, as opposed to the huge machines or high-powered ASIC devices used lately. As more bitcoins were mined and the remaining ones dwindled, the cost of mining each unit steadily increased.

Bitcoin Mining Evolution

Cloud bitcoin mining even developed, as more and more cryptocurrency enthusiasts became interested in mining their own units instead of trading existing ones on exchanges. These allowed bitcoin miners to pool their resources together and even cut down on some costs, such as electricity and equipment.

This also allowed bitcoin miners to improve their hash rate and they’d simply divide the block reward among themselves. Eventually, using the computer CPU was no longer enough and miners needed to use the GPU or graphical processing unit. Apart from that, AMD graphic cards were needed over the usual Nvidia cards in order to enhance the software architecture and power efficiency.

Later on, FPGA mining started to reach the limelight, as models offer as much as 400 MH/s at only 15 watts. The more popular method these days is ASIC mining, which contained chips specifically created for bitcoin mining.

ASIC hardware is capable of making hundreds of thousands of calculations per second, increasing the mining rate while keeping associated power costs low. ASIC bitcoin mining farms became popular, with some costing around $80,000 in electricity costs per month and generating roughly 20 to 25 bitcoins per day. At the current price of bitcoin, this is still a pretty profitable investment and may offer more returns as demand strengthens.

In fact, only a standard computer CPU (central processing unit) can be enough for bitcoin mining operations, as opposed to the huge machines […]

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