Bitcoin

Lack of Bitmain Innovation May Lead to Decentralization

For years, centralization of Bitcoin mining has been a fear among network participants. Die-hard bitcoin evangelists and capitalist day traders alike agree that one entity controlling the hash rate could spell catastrophe for Bitcoin and for the cryptocurrency space as a whole, completely undermining the underlying principles described in the Bitcoin whitepaper and completely destabilizing the market and price action as well.

Bitmain, the world’s largest manufacturer of specialized ASIC Bitcoin mining equipment, is often accused and suspected of having a disproportionately high level of influence over the hash rate due to the giant mining pools like BTC.com and Antpool which are under its control.

A report in July indicated that Bitmain actually already controlled 42% percent of the hash rate, a stunningly high figure with BTC.com controlling 2.5% and Antpool controlling 16.5%.

An entity in control of 51% of the hash rate or higher would essentially have free reign over the network, being able to reject or accept transactions at will and carry out 51% attacks, whipping money out of thin air to become rich at the expense of the integrity of the network.

A successful 51% attack on Bitcoin would make the attackers incredibly wealthy while also catastrophically impacting the price of Bitcoin, perhaps permanently, due to the loss of trust in the network. While Bitmain are getting incredibly wealthy simply by manufacturing effective mining equipment, there is arguably an incentive for the company to attack Bitcoin simply to strengthen the Bitcoin Cash project, although CEO Jihan Wu has never given an indication that he would be interested in doing that.

For many, 42% is far too high for one company to control, and there are theories that Bitmain secretly controls other pools as well.

However, the 42% seen in July has actually dropped significantly instead of increasing as expected. 

As you can see from today’s report from Coin Dance, BTC.com now controls 15.2% and Antpool controls 13.9%, a total of 29.1%.

Why the sudden drop? The answer may lie in the recent lack of innovation seen in Bitmain products coupled with the increasingly more effective hardware released by other companies finally starting to break Bitmain’s ominous monopoly on the largest cryptocurrency network in the world.

We covered the various mining companies and hardware options in our recent article “Mining Wars,” which showed that Halong and other companies are doing great work catching up and surpassing Bitmain’s performance. but what has Bitmain been up to?

Adamant Capital founder Tuur Demeester describes the breaking of the monopoly as the “Commoditization of Bitcoin,” and agrees that the threat to the network is significantly lower with Bitmain operating on a more level playing field.

Demeester cites a recent twitter thread posted by Blockstream’s Samson Mow, someone in indirect competition with Bitmain due to the company’s support for Bitcoin Cash over Bitcoin. Mow frequently posts critiques of Bitmain’s progress and activities, but this time there may be some substance to what he’s saying.

Bitmain’s New Release a Letdown?

Mow used to work as COO for BTCC crypto exchange before heading up Blockstream, and while he is enormously biased when it comes to discussing Bitmain, it’s safe to say that he knows his Bitcoin mining.

“Let’s take a closer look at Bitmain’s announcement at WDMS Mining Conference for their “next gen” 7nm ASIC chips. To most people this may seem like a big deal and good news, but actually the announcement shows things aren’t looking too good for Bitmain.”

  • Mow states that the announcement is vague and fails to mention when exactly the new next-gen chip miners will be released for public sale, which is true.
  • The announcement also states that the 7nm chip will include over a billion trannsisters. Mow says that the statement is deliberately misleading, stating that chip with a billion transistors “sounds impressive to people outside the industry, but it’s not.” It’s like saying “the car will have 4 wheels,” according to Mow, and 8nm or 10nm chips could eqally have a billion transistors.
  • The next bone Mow has to pick with Bitmain is the “lab testing” statement. Bitmain reports results of 32J/TH energy efficiency in lab testing – however, as Mow points out, lab testing always demonstrates the peak performance in ideal lab conditions which are nearly impossible to replicate outside of the manufacturer’s laboratory, making this an inflated figure which does not reflect the energy efficiency which will be experienced by Bitmain customers, as the average efficiency rating is still unknown.
  • It’s also worth pointing out that these are the results for the chip itself, not an entire bitcoin miner – it is unclear how relevant the results be if at all once the chip is tested inside an actual ASIC miner.
  • Mow also mentions that the S9’s chip was initially marketed as having an energy efficiency rating of 75J/TH. In real world situations, the S9 runs at around 98J/TH, or about 30% higher power consumption than reported in the lab. “So it’s likely the new Bitmain miner with 7nm chips runs at 55J/TH at best.”
  • Mow compares the Bitmain announcement, which explained that a new chip had been made for release “soon” along with lab test results outside of a miner, to the launch of the WhatsMiner M10 which had a live miner demo with real stats not measured in lab conditions.
  • Finally, Mow points out that the WhatsMiner uses a 16nm ASIC chip which can be manufactured at half the cost of a 7nmchip, and speculates that even if the 7nm launch results in a good quality miner, the cost may be too high for it to be a feasiboe solution for many miners.

This is all rather incredible sounding given the huge monopoly Bitmain has historically had on Bitcoin mining. Could it be that the tables are beginning to turn and other competitors will begin to snap up larger tracts of the has rate?

Apart from the usual concerns associated with capitalist monopolies, the healthy competition from other miners should indeed prove to bring Bitcoin mining back from the brink of total vulnerability and into a more manageable zone of free market competition and decentralization.

Crypto Is Coming!

Subscribe to our newsletter

Interested in other cool crypto content? Check out The Evolving Bitcoin OTC market and Crypto Hedge Funds.

Follow us on twitter @cryptoiscom

How Green Power Powers the Cryptocurrency Mining Future

Crypto miners are going to extraordinary lengths to bring down the costs of cryptocurrency mining, as hash-rates reach historic highs and prices struggle to move beyond market resistance.

The situation has forced out less efficient miners, with the sector now being dominated by big players with millions of dollars to invest in low-cost, dedicated energy sources. They are also ready to splurge on highly efficient mining hardware.

Cryptocurrency Tool Kit for only $7

Cryptocurrency Mining Figures
Cryptocurrency mining uses up colossal amounts of energy, and according to the Bitcoin Energy Consumption Index tracker, annual energy used in mining bitcoin alone stands at about 53.7 terawatt hours per year. This is more than enough electricity to power a nation such as the Republic of Ireland. Correlated CO2 emissions are currently placed at about 20 megatonnes.

This is because of the Proof-of-Work mechanism that underlies cryptocurrencies, which is very energy intensive. To put this into perspective, a single bitcoin transaction consumes as much power as 4,000 credit card transactions. Significant power is not only required to run powerful mining devices, but also air-conditioning to cool the hardware, which tends to heat up fast when running at maximum capacity.

In current market conditions, almost all bitcoin mining revenues are used to pay off electricity costs. Digiconomist puts the figure at roughly 67 percent, which is a significant portion, while Credit Suisse’ estimation is higher, at around 80 percent.

According to a recent Credit Suisse briefing, a bitcoin price uptick could only lead to greater resources being dedicated to mining, pushing up hashrates and increasing mining-difficulty. Going by the company’s estimations, power consumption on the bitcoin network will have increased tenfold at the $50,000 price point.

A Race for Green Power
To keep energy costs on the low, more crypto mining enterprises are embracing renewable energy. DPW Holdings’ most recent venture is a great example of this new shift.

The firm recently announced the reactivation of the historic Valatie Falls hydroelectric dam in New York, which is set to be operated by its Super Crypto Mining subsidiary. The facility, which was built in 1983 and purchased by DPW Holdings in March, is scheduled to begin operations towards the end of the year.

The company plans on using the dam to power its mining farm, which will utilize AntEater miners, developed in collaboration with Samsung Semiconductors. According to the company statement, the move will ensure a sustainable and economically viable mining model.

Smaller companies such as Golden Fleece, a cryptocurrency mining startup, have also jumped on the bandwagon. The company has reportedly set up base in Georgia to take advantage of low-cost renewable energy generated from water flowing down the Caucasus Mountains.

Migration To Countries With Renewable Energy
The pursuit of crypto fortunes has led more small-scale miners to hunker down in countries with low power rates, mainly attributed to the extensive harnessing of renewable energy. Sweden and Norway, for example, have become a favorite among miners for their abundance of hydroelectric power and low temperatures.

Iceland is also a preferred mining zone among enthusiasts. The country generates over 90 percent of its energy from hydroelectric and geothermal sources. Its cool Arctic air also solves server-room, air-conditioning problems, subsequently bringing down operational costs.

originally posted here

If you didn’t know, you should now…Crypto is Coming.

Subscribe to our newsletter

Interested in other cool crypto content? Check out What is Ethereum’s Casper update? and Game Changer: Binance and LCX Crypto Exchange Joint Venture.

Follow us on twitter @cryptoiscomin

Visualizing Bitcoin Tx Outputs, Fees, Mempool, Block Speed, Hash Rate and Difficulty

Taking a look at the Bitcoin network via transaction outputs, median transaction fee, mempool, block speed, hash rate and difficulty over the past 3 months.

The network seems to be nearing all time lows in terms of median fee ($0.08) which is amazing considering where we were less than a year ago. Tx outputs at over 550k. The mempool is also looking pretty good at only  1,414 transactions after rising a few days ago to 3 month highs. Block speed is at 9.5 minutes while hash rate has bounced back after dipping a couple days ago.

Overall, things look great for the network as a whole relative to 2017. Lets hope the price starts reflecting this….soon.

Interested in other cool crypto posts….check out A look at Historical Crypto Corrections and The Price of Bitcoin vs Cost of Mining.

Follow us on twitter @cryptoiscomin

Subscribe to our newsletter to get the coolest infographics and articles from the crypto world

Check out our Crypto Swag store on Teespring

Bitcoin hash rate spiking to all time high…despite price slump

Bitcoin hash rate is spiking to all time high despite the recent price slump. Miners don’t seem to be worried about the price in the short term with new entrants continuing to enter the market. Hash rate is up +100% since January 1st 2018 and around  +25% since May 1st as well as +15% from two weeks ago. The force is strong here!

At the same time, Bitcoin copycat’s hash rate continues to decline this week. Down over 6% relative to bitcoin.

Bitcoin, one chain to rule them all!

follow us on twitter @cryptoiscomin

subscribe to our newsletter to get the coolest infographics and articles from the crypto world

$BCH losing hashrate relative to $BTC….predictions for 2018…what say you?

BCH (Bitcoin Cash) hashrate continues to decline this week. Down to 6% of BTC’s total hashrate.

looks like BTC hash rate is continuing to go up steadily while BCH hashrate growth has flattened over the past few months. Still early days for this project.

Predictions for end of 2018, what will this look like by end of the year…what say you redditors?