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Mining Crypto Currencies
Mining Crypto Currencies, or E-Currencies, involves using hardware that is either already in your computer, or easily obtainable. The most well known e-currency is the bitcoin (BTC). To implement a distributed timestamp server on a peer-to-peer basis, bitcoin uses a proof-of-work system similar to Adam Back's Hashcash, rather than newspaper or Usenet posts. This is often called bitcoin mining. This same concept is widely used in many other crypto currencies.
The basic steps involved in connecting to the network and mining are as follows;
1. New transactions are broadcast to all nodes.
2. Each node collects new transactions into a block.
3. Each node works on finding a difficult proof-of-work for its block.
4. When a node finds a proof-of-work, it broadcasts the block to all nodes.
5. Currency is successfully collected or “mined” by the receiving node which found the proof-of-work.
6. Nodes accept the block only if all transactions in it are valid and not already spent.
7. Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
There are four different common pieces of hardware used to mine various currencies. The viability of these pieces of hardware have changed over time, and are constantly advancing. The newest, most sought after, and hardest to obtain are the rigs equipped with ASIC chips.
First, just to clarify, the CPU, or central processing unit, is the part of the computer that performs the will of the software loaded on the computer. It's the main executive for the entire machine. It is the master that tells all the parts of the computer what to do - in accordance with the program code of the software, and, hopefully, the will of the user. Most computers have multi-core CPUs nowadays (which is almost the same thing as having multiple CPU's in a single physical package)., and some computers even have multiple CPUs. The CPU is usually a removable component that plugs into the computer's main circuit board, or motherboard and sits underneath a large, metallic heat sink which usually has a fan, a few are cooled by water. CPU based crypto currency mining was the first on the scene. It involves using a computers Central Processing Unit (CPU) to work on finding a difficult proof-of-work for its block. With the ever increasing difficulty of most crypto currencies, bitcoin especially noted, the CPU has become a mostly obsolete form of mining. With an Intel Core i7 utilizing the Ivy Bridge, one can achieve ~90khash/sec, or ~90,000 hashes to the block per second. To one who is not familiar with mining, this may seem like a lot, but it is an insignificant number compared to the speed of which other pieces of hardware can achieve. The CPU was surpassed by the Graphical Processing Unit (GPU).
GPU or Graphics Processing Units mining is significantly faster than CPU mining. One way to think of it is:
”One way to visualize it is a CPU works like a small group of very smart people who can quickly do any task given to them. A GPU is a large group of relatively dumb people who aren't individually very fast or smart, but who can be trained to do repetitive tasks, and collectively can be more productive just due to the sheer number of people. It's not that a CPU is fat, spoiled, or lazy. Both CPUs and GPUs are creations made from billions of microscopic transistors crammed on a small piece of silicon. On silicon chips, size is expensive. The structures that make CPUs good at what they do take up lots of space. When those structures are omitted, that leaves plenty of room for many “dumb” ALU's, which individually are very small”1)
GPU's have thousands of stream processors, and a group of stream processors is a “core” each core, supposing that it is based on the VLIW-5 architecture, would each be able to process 5 instructions per clock cycle. This generally makes GPU's able to mine much faster than CPU's. There are some exceptions where people have tried to implement scenarios in which the mining of coins takes place in an environment more suited to CPU's than GPU's. Litecoin was an example of this, but eventually the GPU miners worked their way in. Using the GPU in my laptop, albeit integrated graphics, still results in faster hashing than my Core i7 3630QM.