12/4/18

Intel: Green light for Bitcoin loophole mining patent

Chip giant Intel received a patent for energy-efficient Bitcoin mining on 27 November. According to the company, this will reduce electricity costs and the size of the chips by up to 15 percent.

After Intel had already filed an application for a patent to optimize Bitcoin mining in March of this year, the company can now claim another success for itself. On November 27, the United States Patent and Trademark Office gave the chip manufacturer the go-ahead for a patent application filed in 2016. The patent details show how mining can be made more energy-efficient.

Increased efficiency by fixing Bitcoin loophole parameters

The mining process is one of the pillars that gives Bitcoin loophole its decentralised character and ensures consensus within the network of the Bitcoin loophole scam. The miners solve a puzzle in a CPU-intensive process in which the SHA-256 hash of an input value must be smaller than a certain target value. ASICs, dedicated Bitcoin Mining hardware, are able to perform a large number of these hashing operations in parallel.

The designs published in the patent now divide the ASIC hashing process into several stages. This saves checking the hashes after each increase of the “nonce”. In this way, miners should be able to determine earlier whether an input value is suitable for the solution. According to Intel, this has the advantage that power consumption and chip size can be reduced by an estimated 15 percent.

The miners have reason to be happy

Developments such as these are particularly welcome in times when Bitcoin’s share price is comparatively low. A low price exerts great pressure on the miners as they can no longer mine profitably. According to an estimate by Mao Shixing, the operator of the Chinese mining pool F2Pool, 600,000 to 800,000 miners have ceased mining since mid-November alone.

This is understandable if one considers the estimates of real mining costs from the recently published report by CoinShares Research. According to this, the costs for mining from a Bitcoin are around 6,000 euros, based on electricity costs of 5 cents per KWh and a hardware lifetime of 18 months. This means that mining is currently only profitable under very specific conditions, such as even lower electricity prices. It is therefore to be welcomed that further chip manufacturers are entering the market and that the market for mining hardware is no longer in the hands of a few players.

12/1/18

Hash Wars: Bitcoin SV strikes the news spy

In a Hard Fork not so far away… raves the Hash War. Opposite are Bitcoin Cash ABC (ABC) and Bitcoin Cash Satoshi Vision (SV). The two sides have been fighting each other for a week now. Who is in the lead?

Bitcoin Cash (BCH) was created on August 1, 2017 – as a hard fork from Bitcoin (BTC). A good year later another Hard Fork was on the agenda, but the Bitcoin Cash community broke apart. Since the evening hours of November 15th, the Hash War has started and is still going on.

Hash Wars on the news spy

To use a Star Wars analogy: Currently, Bitcoin Cash ABC would be considered the news spy, thanks to a higher hash rate. Bitcoin Cash SV is the underdog, the news spy – even if Craig Wright’s personality is more reminiscent of Darth Vader. Enough of the poor comparisons, let’s take a look at the hard numbers of the two Bitcoin cash chains.

The two versions are illustrated on cash.coin.dance: The hash rate was dominated by ABC with a few exceptions. Roger Ver, the operator of Bitcoin.com and mining pool of the same name, was accused of cheating his pool customers. Instead of mining the more profitable Bitcoin (BTC), Hashpower was used on Bitcoin Cash ABC. For example, the mining pool Bitcoin.com sometimes had over 50 percent of the hash power on the ABC version of BCH. A state of emergency that is probably justified by the war. If one would sound the alarm under normal circumstances and point out the 51 percent attack, the end justifies the means. Meanwhile ABC has a healthier distribution in the hash rate. Time of writing Bitcoin.com “only” takes up about 40 percent of the cake.

The situation is different at Bitcoin SV

The mining pool of billionaire Calvin Ayre, Coingeek, accounts for over 60 percent of the total SV hash rate. Ayre is the financial force behind “Satoshi Vision” and thus supports Craig Wright. The majority hash rate in itself does not necessarily mean that a 51 percent attack will happen. However, it is said that such an attack would probably be successful. Of course the question arises why Ayre should attack his own coin (SV).

Another interesting graph is called “Totaler Proof of Work pro Netzwerk”. The solution of all PoW puzzles is added and weighted according to difficulty. ABC clearly has the edge here. Depending on the definition “the true Bitcoin (Cash)” is the one with the most accumulated Proof of Work. This is therefore ABC.

And indeed, the ABC version has been able to claim the name “Bitcoin Cash” and the ticker symbol BCH for many Exchanges. “The opposition shouts “Fraud” and refers to the stolen hash power. In addition, Bitcoin Cash has installed ABC for fear of a 51 percent attack by Bitcoin Cash SV Checkpoints. This means that a reorganisation of the blockchain is only possible to a limited extent. If that’s not cheating, then at least a massive centralization of a supposedly decentralized protocol.