Full Circle Magazine FR

Mining used to be done with CPUs only. It is now also done with GPUs (video cards, primarily AMD/OpenCL video cards), FPGA circuits (programmable chips), and ASICs (hard-coded chips designed to do one task only, like SHA256 hashes). Each is faster and/or consumes less energy than the other. Performance is usually measured in Hashes/second: that is, the number of hashes a computer can try every second. For SHA256-based currencies, mining is currently possible using all of the above methods. ASICs will be hundreds of times faster at mining than CPU mining, with current hardware providing over a Tera-Hash per second, versus a consumer PC providing less than 1 Giga-Hashes/s, and often less than 100 Mega-Hashes/s. This creates a barrier to entry in terms of hardware, which must be very fast for SHA256-based currencies, and that, in turn, favors miners with access to expensive and difficult-to-find ASICs. This is because the total computing capacity of the network is very high because of all the dedicated mining rigs and ASICs, and this in turn pushes the difficulty sky-high, making it difficult for beginners with consumer hardware to be successful at mining. For Scrypt-based currencies, mining is possible on CPUs and AMD GPUs (the latter offering a 10x increase over CPUs). No FPGA or ASICs are available at the moment, although one company announced their plans to commercialize an ASIC by mid-2014. This makes buying AMD GPUs risky when thinking about entering the mining market for such coins. Other currencies, like Primecoins and Quarks can only be mined on CPUs at the present time. Primecoin GPU miners have given it an unsuccessful try, not providing much improvement over CPU miners. These currencies thus give owners of “standard” hardware the ability to participate in mining without too much of a disadvantage.

Dans le temps, le minage ne se faisait qu'avec des CPU. Aujourd'hui, il se fait avec des GPU (des cartes graphiques et surtout les cartes AMD/OpenCL), des circuits FPGA (des puces programmables) et des ASIC (des puces programmées en dur pour faire une seule tache, comme les hash SHA256). Chacun est plus rapide et/ou moins énergivore que l'autre.

En règle générale on mesure la performance en hash par seconde : autrement dit, le nombre de hash qu'un ordinateur peut essayer chaque seconde.

Pour les monnaies basées sur le SHA-256, il est actuellement possible de faire du minage en utilisant toutes les méthodes ci-dessus. Le minage avec ASIC sera des centaines de fois plus rapide que celui avec CPU : le matériel actuel fournit plus d'un Tera-Hash par seconde alors qu'un PC de consommateur fournit moins d'un Giga-Hash/seconde et, souvent moins de 100 Mega-Hash par seconde.

Cela crée une barrière matérielle à la participation, car le matériel doit être très rapide pour les monnaies basées sur le SHA256 et, à son tour, cela avantage les mineurs ayant accès aux ASIC, qui coûtent très cher et sont difficile à trouver. Cela est dû au fait que la capacité totale de calcul du réseau est très élevée à cause de toutes les exploitations dédiées au minage et des ASIC et cela, à son tour, rend la difficulté extrême. Ainsi les débutants avec d'équipements grand public ont très peu de chances de réussir au minage.

Pour les monnaies basées sur Scrypt, le minage est possible sur les CPU et les GPU AMD (ces derniers donnant une rapidité 10 fois celle des CPU. Aucun FPGA ou ASIC n'était disponible au moment où j'écrivais ces lignes, bien qu'une société a fait connaître leur projet de commercialiser un ASIC courant mi-2014. Cela rend l'achat de GPU AMD risqué si vous penser entrer dans le marché du minage d'une telle monnaie.

D'autres monnaies, comme Primecoin et Quark ne peuvent actuellement être minées que sur des CPU. Des mineurs Primecoin sur GPU n'ont pas connu trop de réussite, car les mineurs GPU n'ont pas amélioré leurs résultats par rapport aux mineurs CPU. Ainsi ces monnaies donnent aux propriétaires d'un matériel « standard » la capacité de participer au minage sans être trop désavantagés.

Solo Mining Versus Pool Mining There are two ways to mine crypto-currencies: on your own, or as part of a pool with a revenue-sharing agreement. When you are on your own, you get money ONLY if you mine a block AND manage to be kept in the main chain. You then earn the full block reward. You could get lucky and mine a bitcoin block in seconds and earn a cool 20kUSD. But on average, consumer hardware will take around 60-70 years to mine a single block at the current difficulty. Not many currencies are profitable in solo mining, and the current difficulties need to be analyzed carefully. When you are pool-mining, you are lending your computing power to a pool that gathers multiple miners at the same time. Typically, each mining computer is associated to a “worker” on the pool, which is just a login and a password. When mining in a pool, you will receive a fractional reward for each block that the pool solves and that remains in the main block chain. The fraction of the reward depends on: • how much computing power you have contributed to solving the block • the fees you pay to the pool (typically 2%)

Minage : seul ou en « pool » (groupe)

Il y a deux façons de miner des monnaies virtuelles : tout seul ou en tant qu'un membre d'un groupe ayant un accord de partage de recettes.

Lorsque vous le faites seul, vous recevrez de l'argent SEULEMENT si vous créez un bloc ET que celui-ci soit gardé dans la chaîne principale. Si c'est le cas, vous gagnerez la récompense totale du bloc. Vous pourriez avoir beaucoup de chance et créer un bloc bitcoin en quelques secondes, pour gagner 20.000 $ US - sympa, non ? Mais en moyen, il faudra à du matériel grand public environ 60 à 70 ans pour créer un seul bloc avec le niveau de difficulté actuel. Il n'y a pas beaucoup de monnaies virtuelles où le minage soit rentable pour un mineur seul et il faut analyser les difficultés du moment avec beaucoup d'attention.

Quand vous faites du minage en groupe, vous prêter votre puissance de calcul à un groupe qui rassemble de multiple mineurs en même temps. Habituellement chaque ordinateur est associé à un « travailleur », membre du groupe, ce qui n'est qu'un nom d'utilisateur et un mot de passe.

Lorsque vous faites du minage en groupe, vous recevrez une fraction de la récompense pour chaque bloc que résout votre pool et qui reste dans la chaîne principale. Votre part de la récompense dépend de :

* la puissance de calcul que vous avez contribué à la résolution du bloc * les frais que vous payez au pool (généralement 2 %)

How the pool measures your contributed computing power depends on each pool. Typically, however, a pool will define shares as a block solved with a lower difficulty than the true block difficulty (that share difficulty is defined with each pool). In other words, you are solving shares, which have no real meaning to the cryptocurrency, but not the block itself (if you do solve the block, you would have been better off solo mining :) ). The more shares you have solved for a given block (as a proportion of the total number of shares solved by the pool for that block), the more you are rewarded. So if you have solved 10% of all the shares solved during a given round, you will get roughly 10% of the reward (minus fees and any additional reward attributed to the solver of the block). Some pools have fixed values per share, and increasing weights for the difficulty of the share solved (a share of difficulty 8 will be counted more than a share of difficulty 7). Note that the rules are different in each pool. Note that pools may also just run away with rewards. Cryptocurrency doesn’t require trust, but pools do!

Premining/Instamining; or How to Become Rich, Fast. One technique of exploiting a cryptocurrency is to create a new cryptocurrency, and pre-mine it. In other words, for a while, only the developers will be mining the currency, before actually giving access to a frontend and binary to the rest of the public. This means that the developers have effectively created a large reserve of coins before anybody else could. The next step is to market the currency, so that its value soars vs Bitcoin or the USD. The last step is to sell back the coins earned during the pre-mine for a good profit and very little risk (not much development is needed because all the hard work has been done by Bitcoin, and not much power or electricity is needed to pre-mine). Because of this, pre-mining is viewed as a disgrace by the community, and pre-mined currencies are typically avoided (although good marketing towards the less knowledgeable public may work). As a workaround to this, some developers of new coin have simply resorted to having a difficulty adjustment that will favor people who mine during the first hours of the currency. Some coin developers make it even more difficult by making sure no binary clients are available during that period, so that only individuals who can compile the code from source can participate in those early hours. This is referred to as “Instamine”, and some of the most popular currencies have suffered from it to some extent, intentionally or not.

The Cryptocurrency Frontend The cryptocurrency frontends are almost all based on the original Bitcoin client. When first launched, they will download the whole block chain and check all the transactions - for Bitcoin, this can take over 24 hours. Below is a Primecoin client receiving the last 6 days of blocks: It is possible to send and receive money through that simple-to-use client. To receive coins, you need to create a receive address public/private key. The client can do this for you in the receive menu. By default, the client hides the Private key, and shows only your Public key. You can display the Private key by going to Help, Debug Window, Console Tab, and typing “dumppriv key <public key> Because the network takes care of maintaining the history of all transactions, the ONLY things you need to keep your wallet safe are your public and private key tuples. Print them. Save them. Copy them. Encrypt them. Protect them. Note that the client gives you the possibility of encrypting your wallet (and therefore all your public and private keys) under the Settings menu. The client can do solo mining, however pool mining is advised, unless you have an insane amount of computing power in your hands. Doing pool mining may use a different method/client for each currency/pool, so follow the instructions!

An Interesting Proof-of-Work: Primecoin This section describes an interesting Proof-of-Work used by Primecoin. One of the most common criticisms of cryptocurrencies is that lots of computing power and electricity is lost doing hash after hash, for nothing more than to maintain the ledger. Another criticism is the hardware that mining requires. And not knowing how the difficulties are going to evolve, it makes it very risky to invest in such hardware. Primecoin tries to avoid these pitfalls by having a proof-of-work that can currently be mined only on CPUs, and that helps the world of mathematics by finding Prime Number Chains. Primecoin basically works in almost the same way as any other cryptocurrency: its blocks include a variable nonce and are also hashed using the SHA256 algorithm. However the goal of the proof-of-work is more involved: it requires finding Cunningham Chains of prime numbers of the first or second kind, or a bi-twin chain. More on each can be found on Wikipedia or in the Primecoin paper, but each of those chains has an origin, usually a very large number, that is not a prime. The requirement is that the origin of the prime chain be a multiple of the hash of the block.

The difficulty is adjusted by requiring that the prime chains be at least X numbers long. There is also a fractional difficulty which is linked to the non-prime number that is outside of the chain, but would have followed the last number of the chain. A standard algorithm is therefore to first vary the nonce of the block to find a hash that is divisible by a few prime numbers, such as 2, 3, 5, 7, and 11 (although just iterating through this can take time), which increases the odds of finding a prime chain whose origin is a multiple of the hash. Because the numbers used are extremely large numbers, which are not easily supported by GPUs, the only way to mine right now is via CPUs. The mining performance is measured in primes/second or chains per unit of time. Primecoin gives a strong incentive to find better/faster algorithms to find prime chains, as well as give data to mathematicians about getting a better picture of the distribution of these chains within the natural numbers.

How Much is it Worth? So, how much is a given cryptocurrency worth? It is all in the eyes of the beholder, like pretty much anything else that can be bought and sold, such as gold. If people think a coin has value, and are willing to pay for it, then that coin has value. Bitcoin is currently traded at around 900 USD per bitcoin, a staggering increase from the fractions of a dollar it was worth three or four years ago. It is highly volatile, and a very dangerous investment. The people who have earned the most from Bitcoin are those who were mining at the start. It is estimated that the creator (or creators? – it is a bit of a mystery) of Bitcoin has around 1 million bitcoins, which makes him/her/them almost a billionaire. Another popular story is that of a man having bought 27 USD worth of bitcoins a few years back, only to realize that today they are worth almost 1 million USD. And a third story is of a man who forgot the private key to his bitcoin address, having thrown the hard drive containing the wallet away. Too bad, because he had 7,500 bitcoins (around 7 million dollars!) which now have been lost… Each coin is different, and also depends on which markets it gets listed on. Because yes, there are markets for cryptocurrencies, such as Mt. Gox (a Japanese company) and Cryptsy (an American company). These exchanges typically quote only the major cryptocurrencies (Bitcoin, Litecoin) against the dollar. Then other currencies are quoted against the bitcoin and litecoin.

As I am writing these lines, a Primecoin is quoted at 0.0047 bitcoins, itself quoted at around 915 USD. So each of the Primecoins I own is worth (before transaction fees) roughly 4.3 USD. After mining any cryptocurrency, a miner has two choices: • hold the cryptocurrency in the hopes that its worth per unit will rise (it could fall!) • immediately convert this cryptocurrency into USD Of course one alternative is riskier than the other, but seems to be the one chosen by many miners, as they believe in cryptocurrency - this can be cited as one of the reasons the coins are valued so much. Should I Mine a Cryptocurrency? Which One? Mining is a relatively risk-free endeavor, although it can be frustratingly slow depending on your hardware. The only risk being taken is that the electricity and processing power that went into mining were for naught, if the value of the cryptocurrency suddenly plummets. It can therefore be “fun” to mine. Just see it as a hobby that has the potential to bring you some revenue, and not a true source of revenue. Certainly not a replacement for your salary.

There are online return-on-investment calculators such as Coinwarz, which will indicate the cryptocurrencies that currently would provide the best return on investment for a given hardware capacity. This tends to change a lot because of fluctuating cryptocurrency to bitcoin to USD charts! But it can give you a good idea of what would be good to mine by looking at which coins stay on top for several days in a row. Next month Oscar will discuss alt-coins such as Litecoin, Dogecoin, etc. Main sources: • the bitcoin paper: http://bitcoin.org/bitcoin.pdf • the excellent, but fast-moving, under-the-hood explanation of bitcoin (this explanation follows roughly the same structure, but spends more time on some points and less on others): http://www.imponderablethings.com/2013/07/how-bitcoin-works-under-hood.html • the Primecoin paper: http://primecoin.org/static/primecoin-paper.pdf • an explanation of the paper: http://www.reddit.com/r/primecoin/comments/1rp5vx/could_someone_explain_in_detail_the_algorithm/ COMPETITION Win 500 Dogecoin (DOGE) by answering the following question: You can view your private key by going to ___ ? (Hint: the answer is in the article) Email your answer to: ronnie@fullcirclemagazine.org before Friday 23rd May. The winner will be notified via email for a valid Dogecoin wallet address. Oscar will be putting some of his cryptocurrency for grabs next month.