Can Crypto mining and Blockchain technology provide a new means of globally transacting?

Cryptocurrency mining has has seen a huge increase in the past number of years. From individuals running algorithms on their home P.C CPU’s to industrial warehouses being filled with Application Specific Integrated Circuits (ASICS), cryptocurrency mining has risen and evolved exponentially since the Genesis block was initially mined on the third of January 2009, a mere 3,529 days ago paying the first 50 Bitcoin as a reward. Bitcoin uses a cryptographic algorithm called SHA256 to encrypt its blockchain based hash. Hashing encrypts a users message to allow for secure transfer of a given function using a cryptographic signature to ensure transactions are both private and secure. This combined with the break through to secure digital financial transactions using Distributed ledger technology and the implementation of the double spend solution has allowed for individuals from all across the globe to become part of a new global financial system. Many people view Bitcoin and the cryptocurrency movement as an alternative to the current financial system and in many ways it has the potential to do so, however it is a long way from being of that capacity.

Bitcoin mining involves individuals who invest processing power to hash Blockchain transactions resulting in a publicly distributed ledger. This ensures no malpractice can occur on the Blockchain to manipulate the ledger and so is accepted by the general public as a true and correct ledger. Private Blockchain’s are also in use and can generally best be exampled when a company (or really any private institution) advertises the use of Blockchain technology. These do not require miners and are managed locally within the organisation as the company owns the Blockchain and can confirm independently that the ledger is correct.

As mentioned Bitcoin and in particular Bitcoin mining has grown and evolved in the 9 years or so in which it has been introduced. Its evolution has taken it down many avenues from CPU to FPGA to GPU to now ASICS. The mining of Bitcoin and other Crypto currencies has also become more and more popular with private investors and keen spirited individuals alike. Mining has been a profitable and a not so profitable business through its number of years. Currently the cost to associated with small to medium operators is far to great to be profitable within the current market. Many individuals who are in a position to do so may be interested in the technology and want to be apart of the movement or may just want to hedge some of their money into a new emerging market.


Bitcoin has given individuals all across the world a method of transacting financially which does not require the use of a financial intermediary. Payments are fast and secure and do not require KYC regulation or anti money laundering legislation as by the nature of Bitcoin it is a private currency. This can be seen as a problem for the currency and in my opinion it will require some legislation to be accepted within the current financial system, I imagine this is being reviewed in some detail at this moment in time. For Bitcoin to evolve into the entity that is expected to it will require some further development and adoption. Time and resources are continually being contributed to this with both at an ever increasing rate.

Bitcoin is also approaching its next halving which will occur on the 21st of May 2020, this will reduce the block reward from 12 Bitcoins to 6.5 Bitcoins. This is seen by some within the community as an indicator for eventual price increase as previous halvings have occured and have been followed by an eventual rise in price, for mining to be maintained on a continual basis reward price for mining a block must be in line with overhead costs of operation and maintenance on machines. No one can tell when price will drop or rise this is the nature of markets albeit unless you are involved in general price manipulation and have quite deep pockets to influence the total market capitalisation. This is the topic of another discussion however.

Overall miner revenue from inception

Bitcoin mining began quite humbly with individuals (early adopters) and investors providing computational power derived from their CPU’s. GPU’s then took the place of CPU’s as they could hash transactions at a faster rate. 
This then began to evolve into FPGA boards which were programmed to run the Bitcoin Core algorithm and process transactions on the blockchain and now we have seen the rise of the formidable Bitmain with their ASIC’s to dominate the mining sphere. Many competitors have began to emerge however Bitmain has maintained its position as the dominant force with IPO talk on the horizon rumored to be close to 18 billion dollars. Bitmain is both admired and hated within the mining community. It has created magnificent machines capable of running in a home environment and have also stood the test of time. The Antminer S9 was first released on May 31st 2016 to mine the Bitcoin SHA256 algorithm and is still available on the market with very little changed. It currently Hash’s at 14 Tera Hash’s a second however it currently runs at an astonishing 1300w. This has given many individuals the opportunity to become involved in mining crypto currency however has also caused some dispute within the community. Being that Bitmain produce the majority of the machines capable of processing Bitcoin transactions it can be argued that they could create enough machines to 51% attack the network, this would not be in their best interest given that their business model revolves around Bitcoin however it is a fear; Bitmain are also great purporters of Bitcoin Cash a fork of Bitcoin which caught some initial interest but has like all forked variations of the original code been disregarded by the general community.

The problem with having one company as the central producer of mining machines is that it places reliance on this company to act in every-bodies best interest and could be viewed to some extent as a central authority as it contributes the majority of the computational power to the network. For this reason an alternative is required. An alternative that allows individuals from any walk of life with an interest in taking control of their personal finances to begin mining and become part of a global and secure means of transacting. Taking the initial step towards this can set you on a path of personal development and peace of mind knowing that your money is your own and can not be taken from you upon the liquidation of an investment company or the collapse of a financial institution as seen during the global crisis. There are many individuals in the world who feel the current financial system is not transparent enough for the amount of reliance placed on it. Within Bitcoin’s original code is embedded the sentence “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. This has developed into the anti bank/corporation stance taken by the community and is more than likely the reason Satoshi has remained anonymous. However Crypto currency does not fully solve that problem and mining and financial investment are high risk in themselves as this is new technology and there are many coins and tokens which have no use case as an investment. This is requires some regulation or at the very least individual research prior to purchase as is always advised.

Recently companies within the Crypto sphere have looked to branch away from Bitmain to create their own mining machinery. David Vorick of Siacoin announced that the company will hard-fork the Blockchain and become ASIC resistant. The article can be found here – This is a move that has occurred previously within the community and is an attempt to leave the previous version of the coin obsolete thus removing Bitmain’s position within the Siacoin mining pool. Siacoin have created their own mining machinery known as the Obelisk which is an ASIC miner. Purchases can be made for both Decred & Siacoin with Decred mining at 1200+ GH/s and Siacoin mining at 55+GH/s both with a power consumption of 500W. This is an interesting move as it gives full control to the coin developers to manufacture and supply the machinery specific to their coin. To get a better understanding of how mining hardware has progressed over the past number of years I have given a brief overview of the methods used so far.

Different Methods of Mining

CPU – Central Processing Unit mining involves dedicating processor cores to running a mining algorithm. This was the initial starting point for mining and can still be used for some lesser known algorithms for lesser known coins and can be a good point for anyone interested in beginning as every P.C will have one.

GPU’s – Graphics Processing Units are great for running memory intensive algorithms, many GPU’s can be used to dual mine coins also. For example Ethereum can be mined in conjunction with Siacoin or Decred. Other coins can be mined also using GPU’s this website can help you make a decision GPU’s trumped CPU’s as the hashing output multiplied and return on mining increased.

FPGA – Field Programmable Gate Arrays took place in mining after GPU’s. FPGA’s are versatile and can be reprogrammed to other uses. A user can programme different algorithms to the device depending on the specific algorithms profitability. There is small barrier to entry with some programming skills required however much information on this can be found online or in books.

ASIC – Application Specific Integrated Circuits are programmed for one specific service. Asics first emerged in the mining sphere around 2012 and have dominated the industry ever since. Many companies have emerged however few have maintained dominance to the extent of previously mentioned Bitmain. Asics are power intensive but produce hash rates that exceed the three aforementioned methods.

Proof of Stake – another notable method for mining cryptocurrency. This requires a user to have a holding of a cryptocurrency and for the coins wallet to run on their desktop to process blockchain transactions. The higher holding of coins the greater or more frequent the return is.

HDD mining – Hard Disk Drive mining is also becoming a method for mining with the use of HDD drives to utilize a ‘Proof of Capacity’ algorithm. This is the method of providing hard drive space on a users computer to run a mining algorithm or provide space to coins providing a service such as Storj, Siacoin & Burst.

The below graph shows the increase in overall mining hash rate from January 2009. This may seem similar to the graph above however as of July 2018 the hash rate has not dropped as sharply as the price of Bitcoin. It can be assumed that the miners mining Bitcoin also mine other algorithms also. The Bitcoin has rate can be used as a marker for the market as a whole. Specific rates for Alt coins can be found online, there are too many to mention in this article. Visit for further information on previous & current hash rates.

Focusing on ASIC’s the power to hash rate comparison is by far the greatest return for value when mining the largest coins within the market Bitcoin, Ethereum, Litecoin, Monero. However there are many other coins and algorithms which can be mined profitably using FPGA’s and GPU’s. With expected increases in processing power in the FPGA field and the introduction of 7nm processing chips for ASIC’s profitability should increase in line with these technological advances. Bitmain the largest producer of ASIC machinery is also due to IPO shortly. Many competitors are emerging however which will hopefully create some much needed competition within the marketplace .


Mining is an imperative aspect of cryptocurrency and is fundamental to decentralization. It will continue evolve and develop introducing new and more user friendly ways to contribute and become involved. Keeping up to date with the most recent innovations is important for any miner and there are many exciting projects being worked on currently including some of the projects discussed on this website. Many advances are reliant on further developments within certain sectors of the technological industry such as Quantum Computing and Artificial Intelligence.

Blockchain technology is well positioned to be utilized by these industries as it allows for large quantities of data to be managed and stored both securely and digitally. Crypto currency is just one use case that has emerged upon the development of Distributed ledger technology. Smart contacts and further development layers will introduce new and exciting advances as the technology is adapted within the global economy, not also to mention that the Crypto currency in itself is a new asset class and means of transacting independently. That in my opinion is reason enough for larger investors to become involved in the market. Token trading is a more efficient means of trading value, payments are near instantaneous and can be exchanged for Euro and Dollar value with far less fees than traditional brokerages. If any readers have attempted to trade within the financial market the fees associated are tremendous and would discourage you from trading as an individual. Perhaps as the market develops this aspect with be adopted within the wider financial system. 

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