The process of mining cryptocurrencies is still widely considered as confusing and is misunderstood by many. This article offers a simple explanation of this mechanism as well as presents an exclusive peek into one of mining farms in Poland.
Mining is a process of generating digital currencies where mathematical puzzles are solved and thus new transaction blocks are released. During the mining process, the latest transactions’ authenticity is verified and compiled into blocks. The user (‘a miner’) who solves this problem first receives a reward in the specified cryptocurrency. This kind of work takes place at a mining farm, although it differs from a conventional mining farm. Usually, a crypto mining farm is a set of interrelated mining rigs verifying transactions.
Before the global Bitcoin mining boom, the concept of a “farm” didn’t actually exist. One’s personal computer was good enough to successfully mine any cryptocurrency, but throughout time and the growing interest in crypto, the subsequent advancements made normal laptops inadequate. Due to the unprecedented boom of the total network hash rate, solo mining became irrelevant for years. The enthusiasts started looking for new computing power (with a number of graphic cards, ASIC chips, hard drives, etc.) so as to achieve a better performance and that’s how the idea for mining farms emerged.
Our marketing Team has visited the mining crypto farm that is related to Tecra miners. This specific cryptocurrency mining farm is located near Warsaw and started operating in 2016. The mining farm is an area of 480 square meters and a 2/3 of this space is occupied by the mining-rigs. The rest of the building is used for maintenance, e.g. for fixing the broken graphic cards. There are 140 video cards in the farm; 90 of them are active. If the demand for the TecraCoins goes up, the remaining cards can be used. (There are also more than 100 graphic cards available that are in storage and can be quickly assembled and connected to the main system.)
Video cards are placed in an aluminum frame of 5–7 units, which are connected to the processor and the motherboard. The wires are carefully and intuitively grouped together from the processors creating one cable system. The cable management is a very important security factor, for example in the unlikely event of an electrical short circuit and fire. The cable systems are connected to several large power supplies. Since cryptomining is an energetically demanding activity, the farm is connected to its own set up transformer, which is linked to the power distribution point in the area. The transformer is connected to an average voltage of 15000 V. The power of the transformer is 640 kWh, being less than half loaded. The mine works 24/7 and consumes 250 kWh.
This farm uses EVGA GTX 1080 ti cards. The farm uses GPU cards because the computing power is concentrated in one control panel, so the control over the mining belongs exclusively to miners. They refused the opportunity to use the ASIC-processors, as they are designed only for the purpose of mining cryptocurrency (commonly Bitcoin and Litecoin), and the algorithms differ from one coin to another. Whereas anything can be mined by the use of the GPU cards, it is also possible to change the cryptocurrency being mined (so you can mine twice as much the less valued currencies and then trade them into more valued Ethereum or Bitcoin gaining more profits compared to the scenario where you could have mined specifically only Bitcoin). GPU-carded farms are easier to handle and require less investment capital and time, and can “maneuver” between different cryptocurrencies. At the current hash rate (1.0149 GH/S), approximately every two and a half minutes, one TCR block containing 112.5 coins is issued which gives an average of 576 daily issued blocks.
But in order to really comprehend the futuristic world of cryptocurrencies, one not only has to understand the way mining pools work, but also know the main crypto-related phrases as well as any activity that is connected to them. In the second part of the article, we explain some of the most used and yet widely misunderstood crypto- terms.
What does it mean when a cryptocurrency uses blockchain technology? It means they are resistant to the double-spending problem [spending the same digital currency twice, just like copying and using computer files a number of times] due to the decentralisation of mining. In order to decide which transactions in chained blocks are to be accepted, the method called Proof-of-Work (PoW) relying on computing power was implemented. Theoretically, there still is a slight chance of a threat — a so-called 51% attack. In this hypothetical and rather unlikely case, people with 51% of the computing power would take over the network and decide which transactions are legitimate on their own.
Mining is the process aimed to perform complicated calculations in the search for a distinct number. In cryptocurrencies, ASIC devices are designed to aid in the process of mining Bitcoin (or other PoW-based cryptos like e.g. Ethereum). ASIC (Application Specific Integrated Circuit) is a chip that is designed to do a specific type of algorithm only. ASICs cannot perform general calculations as it is in our home computers. In cryptocurrencies, they are used for mining using specific algorithms. They are powerful, cost-effective and energy efficient in terms of hashes.
Hashing is the process of converting an input of any length into a fixed size string text using a mathematical function- this means that any text, no matter how long it is, can be converted into an array of numbers and letters through an algorithm. The first block in blockchain known as genesis block contains transactions that when combined, produce a unique hash; when the second block is created, the hash of genesis block is combined with the new transaction in the second block. This combination is used to create its unique hash. This process is repeated until all the new blocks are added to a blockchain.
Hashes are important because of their identification role — the produced formula is called a Transaction ID and is used to identify and confirm a transaction.
TecraCoin wants to bring a more egalitarian approach both to mining and investing. So far, there was no public market for patents; they were available mostly as private deals done by corporations and investment funds, sometimes intentionally not delivering them to the market. We believe that the ability for the scientists and inventors to access the financial markets easily and cheaply will bring more democratisation to science and will speed up innovation processes all over the world.
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