A Step-by-Step History of Bitcoin Mining

Over the past decade, the machines that maintain the Bitcoin network have undergone rapid technological development.

Mining equipment is a fundamental feature of the success of the bitcoin network because these machines determine whether or not it is profitable for miners to do what they do – that is, process the calculations needed to embed blocks of transactions on the blockchain. 

While somewhat overlooked, the history of bitcoin mining equipment is also a key explanation for why the activity of mining has evolved over the years into a multi-billion dollar industry. The mining industry continues to evolve today, though there are signs to suggest its development is slowing down. 

Related: Bitcoin Miner Maker Ebang Files for a $100M US IPO

Read more: Bitcoin Halving 2020: The ‘Arms Race’ for Miner Efficiency Intensifies

Below we take a look at the complete history of bitcoin mining technology, and where innovations could be heading next. 

CPU Mining

On Jan. 3, 2009, pseudonymous creator Satoshi Nakamoto mined the first bitcoin block. As the only miner on the bitcoin network at the time, Nakamoto didn’t need specialized equipment to launch the bitcoin blockchain. He was able to create bitcoin blocks using an average personal computer. 

Read more: China’s Rainy Season Is Coming. This Time Bitcoin Miners Aren’t Investing

Related: Bitcoin Halving 2020: The ‘Arms Race’ for Miner Efficiency Intensifies

Computers used to browse the internet, launch Microsoft Word and a number of other countless applications all contain what is called a central processing unit (CPU). These devices control how commands on a computer are processed and executed. Due to the lack of miner competition in bitcoin’s early days, the computational energy required to create new blocks and earn mining rewards could be easily processed on CPU devices. 

Hardware needed to mine new coins evolved over time as new miners joined the Bitcoin network and started to compete for block rewards. 

Source Link

Advertisements