The Trouble with Mining Cryptocurrency

Recently, I decided to revisit the world of cryptocurrency mining. Guess what? There are a lot of problems in this “crypto-world” of currency. It’s like looking for signs of intelligent life using the seti@home application that I used years ago. Even my server with 2 CPUs cannot process data fast enough to earn a crypto red cent. The seti@home project seemed to have ushered in the concept of Distributed Computing using members personal computing power. Seti@home utilized some of the same technology that has fostered the growth of crypto-mining, and the subsequent arms race to mine with faster and faster computing power. “Distributed Computing” refers to the use of distributed systems to solve computational problems. In distributed computing, a problem is divided into many tasks, each of which is solved by one or more computers, which communicate with each other by message passing.” After some research, I found that mining is no longer done with a CPUs computing power because they cannot process the data fast enough. According to Christopher Mims of The MIT Technology Review “ The Central Processing Unit (CPU)–the component that has defined the performance of your computer for many years–has hit a wall.

In fact, the next-generation of CPUs, including Intel’s forthcoming Sandy Bridge processor, have to contend with multiple walls–a memory bottleneck (the bandwidth of the channel between the CPU and a computer’s memory); the instruction level parallelism (ILP) wall (the availability of enough discrete parallel instructions for a multi-core chip) and the power wall (the chip’s overall temperature and power consumption). Of the three, the power wall is now arguably the defining limit of the power of the modern CPU.“……. Hmmmmm what then is the solution to the crypto mining puzzle? To further decipher this puzzle, I decided to look into GPU computing power the next faster level of computing. “General-purpose computing on graphics processing units (GPGPU, rarely GPGP) is the use of a graphics processing unit (GPU), which typically handles computation only for computer graphics, to perform computation in applications traditionally handled by the central processing unit (CPU).The use of multiple video cards in one computer, or large numbers of graphics chips, further parallelizes the already parallel nature of graphics processing. In addition, even a single GPU-CPU framework provides advantages that multiple CPUs on their own do not offer, due to the specialization in each chip.

Essentially, a GPGPU pipeline is a kind of parallel processing between one or more GPUs and CPUs that analyzes data as if it were in image or other graphic form. While GPUs operate at lower frequencies, they typically have many times the number of cores. Thus, GPUs can process far more pictures and graphical data per second than a traditional CPU. Migrating data into graphical form and then using the GPU to scan and analyze it can create a large speedup.

GPGPU pipelines were developed at the beginning of the 21st century for graphics processing (e.g., for better shaders). These pipelines were found to fit scientific computing needs well, and have since been developed in this direction.” So would this method ever support my crypto mining aspirations? Surprise! Surprise! Yes, it could! And the operative statement is with an 8X SAPPHIRE RX VEGA 64 8GB HBM2 http://www.sapphiretech.com/productdetial.asp?pid=6BC8485A-C1BD-46C3-A6C5-32BB65B3DFF0&lang=eng with its 4096 Stream Processors 14 nm FinFET 1677 MHz Boost Engine Clock. I can get a HASH rate of 16032 it could earn the following amount.

1 DAY

1 WEEK

1 MONTH

Income

0.00018100 BTC

1.62 USD

0.00144062 BTC

12.87 USD

0.00721077 BTC

64.43 USD

Please note that these values are only estimations – real values can be lower or higher. The exchange rate of 1 BTC = 8935.00 USD was used. Calculated values in the table are for past day, past week and past month. For details visit: How to properly use and understand Profitability calculator. https://www.nicehash.com/help/how-to-properly-use-and-understand-profitability-calculator That’s not too bad so long as the price of Bitcoin stays steady or goes up. Oops I forgot the cost of this video card, ranges from 1099.00 to 2893.00 per card. WOW, that means at best 1099.00 / 64.43 = 17.05 which is how many months I would have to mine to get my money back for the electricity and the cost of the video card; nevermind the 1 to 1.5 % fee charged by my handy digital wallet. I would have to mine 24/7 for over 17 months to break even or less LOL. Ok I don’t give up so easily so I am going to look at another type of crypto mining ASIC Mining. “Application-Specific Integrated Circuit (abbreviated as ASIC) is an integrated circuit (IC) customized for a particular use, rather than intended for general-purpose use. In Bitcoin mining hardware, ASICs were the next step of development after CPUs, GPUs, and FPGAs. FPGAs or Field Programmable Gate Array were the former king of the Bitcoin mining world prior to today’s use of ASICs. An FPGA is an integrated circuit whose function can be changed as it can be reprogrammed. These were more versatile than an ASIC, but far less efficient in their ability to mine cryptocurrency. They enjoyed a short time between GPUs and ASICs as the most efficient way to mine. Capable of easily outperforming the aforementioned platforms for Bitcoin mining in both speed and efficiency, but along came the ASIC miners. ASIC miners are the fastest, most efficient mining platform to date;( ASICs using (SHA256) and (SHA256d). Cryptographic hash functions are mathematical operations run on digital data; by comparing the computed “hash” (the output from execution of the algorithm) to a known and expected hash value, a person can determine the data’s integrity. For example, computing the hash of a downloaded file and comparing the result to a previously published hash result can show whether the download has been modified or tampered with. A key aspect of cryptographic hash functions is their collision resistance: nobody should be able to find two different input values that result in the same hash output.” I’ve come a long way baby, but what does ASIC minIng really mean? There are several iterations of miners, but there are only three manufacturers that make ASICs that exceed the hash power of literally all GPUs. Antminer, Avalon, and Whatsminer. They use SHA256 hash algorithm. Based on the 16nm chip platform “The BM1387 ASIC chip; The world’s first bitcoin mining ASIC based on the 16mn process node Bitmain’s BM1387 chip is built using TSMC’s 16nm FinFET technology and is the world’s most efficient bitcoin mining chip in the consumer market. Each Antminer T9+ employs 162 such chips to deliver a stability and efficiency combination not found in any other Bitcoin miner in existence.” wait 16nm vs 7nm BTC ASIC6 16nm has (60 Cores) and 7nm (126 Cores) resulting in the following comparison characteristics:

Bitmain BM1387

16nm ASIC proposes 71 – 74 GH/s and .9 J/(GH/s)

NODE Haven

7nm ASIC proposes ~150 GH/s and .7 – .5 J/(GH/s)

The 7nm also has Room for >2X number of hash-cores and up to 55% better efficiency.
According to Scotten Jones of SEMI one of the global industry associations serving the manufacturing supply chain for the micro- and nano-electronics industries. In addition TSMC the world’s largest dedicated semiconductor foundry, providing the industry’s leading process technology and foundry’s largest portfolio of process-proven libraries, IPs, design tools and reference flows, purports that moving from 16nm to 7nm will either increase the speed ~38% or decrease power consumption by 60%, with a reduction in area of 70%. (NODE Haven estimates use at 55% Area Reduction and 50% better efficiency) TSMC”s website comparison pits their 10nm FinFET process against their 7nm FinFET which features 1.6X logic density, ~20% speed improvement, and ~40% power reduction.

Currently, the Bitman doesn’t seem to be available for purchase and the miner they do produce and sell does not seem to have specifications on their website. It all looks a little shady…… hmmm? I’m sure they work fine for Bitman farms, but as a lone wolf, I am a little concerned that I may simply be separated from my money $2000.00 or more. Ok, so let’s say I would like this miner. What is the projected profit? Well, for the S9 Antminer S9-13TH/s with PSU

This is what you get:

1 DAY

1 WEEK

1 MONTH

Income

0.00064578 BTC

5.80 USD

0.00471282 BTC

42.34 USD

0.02197702 BTC

197.46 USD

“Antminer S9-13TH/s with PSU Shipping: March 21-30,2018
2000 USD 0.22008253 BTC; 1.85904550 BCH; 11.49557354 LTC;”

Bottom line is they are not available; The good news is $2000.00 / 197.46 = 10.13 so in about 10 months, God willing,( and the creek don’t rise) I will see a return on my investment. So with some patience, I may be able to profitably mine. The bad news is the mining organizations seem to be snapping up all of the ASIC miners before the general public can purchase any. Perhaps it’s greed; Perhaps it’s buying power, but no matter the reason this process does not support the decentralization of the cryptocurrency market or any other crypto endeavors. A lot of people don’t have a spare $2000.00 they can invest towards keeping the crypto market decentralized, let alone, wait almost a year before they potentially see their cash returned. So if the market is going to remain decentralized someone has to provide ASIC miners that are affordable and marketed to Jane and John Doe public. Who will stand up to the large Mining farms (“BigCrypto”)? I simply want to mine crypto and earn a fair return on my investment. I don’t want all the money, but I would like to get paid, do my part to keep the cryptocurrency markets decentralized and have fun doing it. So, what is the solution? There needs to be a better way to get the ASIC mining Machines into the hands of the general public, at a lower entry price point, and with guaranteed delivery.

Is that the promise of https://nodehaven.com/

The Node Haven token essentially provides everyone with the same advantage to that of “BigCrypto” and the ASIC manufacturers. With a Node Haven token, you can get the latest equipment at cost, and the token allows you to reserve miners to assure you get the first priority to purchase production runs. This will over time help to keep the Cryptoverse decentralized and help to maintain the integrity of the blockchain.

The Conclusion of The Satoshi Nakamoto White Paper is as follows:
http://nakamotoinstitute.org/
“We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership, but is incomplete without a way to prevent double-spending. To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power. The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.”

This conclusion supports the underlying assumption of Node Haven; The aforementioned peer to peer network combats double-spending, proof of work, and records the transactions. This history of transactions that quickly becomes computationally impractical for an attacker to change; IF and only IF the Cryptoverse can remain Decentralized which can only be maintained if HONEST NODES CONTROL A MAJORITY OF THE CPU POWER ( HASH RATE ), THAT THE NETWORK IS ROBUST IN ITS UNSTRUCTURED SIMPLICITY, AND NODES WORK ALL AT ONCE WITH LITTLE COORDINATION.

The GOAL of Node Haven

Is to supply high-quality, low-cost ASCI miners to Jane and John Doe Miner which would intern significantly support Satoshi’s original vision of a Decentralized Cryptoverse.

Ok, that was a lot of information about crypto miners. Will Node Haven have a significant impact on crypto mining? Can they fulfill their promise maintaining the decentralization of the Cryptoverse? Only time will tell, but based on the design improvements found in the Node Haven White Paper, NODE Haven plans to improve the design of current cryptocurrency miners to provide vastly more versatile equipment that is as future-proof as possible. They have also spent extensive time talking with cryptocurrency mine operators and their best-in-class technical partners in order to propose the following improvements:

1. 7nm ASICs with on-chip temperature control logic allowing for multiple modes of operation

a. Optimized for Speed (Max Operating Temperature)

b. Optimized for Efficiency [Optimal Temperature for lowest J/(GH/s)]

1. Interchangeable Hash-Cards allowing for upgrades of the mining equipment

a. BTC Hash-Card: 10 TH/s per card

1. Multiple Chassis Options

a. Shoe-Box Antminer S9 Equivalent: ~30 TH/s (3 Hash-Cards)

b. 4U Server Chassis: ~100 TH/s (10 Hash-Cards)

1. Air-cooled, Liquid-cooled and immersion cooling options

2. Upgraded SoC and controller to handle the extra hash-cards

It looks like they are onto something that could make mining possible for Jane and John Doe while also fostering the continued decentralization of the blockchain AKA The Cryptoverse. Good luck Node Haven

Design Improvements

This exercise has been produced to give a comparative cost estimate in relation to the popular Bitmain Antminer S9. NODE Haven plans to improve the design of current cryptocurrency miners to provide vastly more versatile equipment that is as future-proof as possible. Node Haven states they have spent extensive time talking with cryptocurrency mine operators and our best-in-class technical partners in order to propose theses improvements.

Thanks to the all of the researchers, articles, and resources listed at the end of this Document, I was able to decipher this crypto mining puzzle.

TODAYS ASIC miners

The Dragonmint presale pre-orders for this miner (for a minimum of 5 miners, at $1595 per miner), for delivery in March 2018. To put things in perspective, the Bitmain Antminer S94 (ASIC) hashes 13,000 times faster than the best in class NVIDIA GTX 10805 (GPU). but it doesn’t seem to be available.

1. Antminer S9
   Supremely energy-efficient mining hardware
   Cost: $2,320 (£1,720) | Power usage: 1,375W | Hash power: 13.5 TH/s | Daily profit: 0.0017904 BT1C
   Reputable manufacturer
   Extremely energy-efficient
   Difficult and expensive to order
   The Antminer S9 is manufactured by Bitmain, the largest and most well-known mining equipment manufacturer in the world which has been going since 2013.
   The Antminer S9 is one of the most popular ASIC mining devices out there, and other mining hardware is often benchmarked against it.
   The New T9 Hashrate 10TH/s, 10.5TH/s, 11TH/s, 11.5TH/s or 12TH/s depending on the batch. Variation of ±5% is expected. Not released

2. Antminer S7
   A potentially canny investment, but tread carefully
   Cost: Varies | Power usage: 1,293W | Hash power: 4.73 TH/s | Daily profit: 0.00061590 BTC
   Less expensive than the S9
   May provide faster ROI
   Only available used
   The Antminer S7 was manufactured by Bitmain and is the predecessor to the S9. Since the S9 arrived, many miners have upgraded, flooding the market with relatively cheap used S7 devices.

3. AvalonMiner 761
   Highly praised and relatively wallet-friendly devices
   Cost: $1,860 (£1,375) | Power usage: 1,320W | Hash power: 8.8 TH/s | Daily profit: 0.00114587 BTC
   Less upfront cost than Antminer devices
   Reputable manufacturer
   Little online support
   Avalon, an offshoot of China-based firm Canaan Creative, was amongst the first firms to manufacture Bitcoin-specific ASIC chips, so it’s safe to say that the company knows what it’s doing when it comes to Bitcoin mining hardware.
   Advertisement
   Like its predecessor the AvalonMiner 6, the 7 series has had generally good reviews with miners praising Avalon’s innovation in pioneering the A3212 16nm chips employed in the units, as well as how quiet these devices are when running.

4. WhatsMiner M3
   A great alternative miner with an impressive warranty
   Cost: $1,899 (£1,400) | Power usage: 2,000W | Hash power: 12.5 TH/s | Daily profit: 0.00162765 BTC
   180-day warranty
   PSU is included in the price
   Currently out of stock
   The M3, which was released in late 2017, is manufactured by Chinese firm Pangolin Miner. The manufacturer’s website not only provides detailed information on the miner but an excellent tutorial video on getting set up. This includes connecting the device via Ethernet and configuring your mining pool settings via the M3’s web interface.
   While the hash rate is slightly less than the Antminer S9, this unit is far cheaper, meaning you could see a return on your investment in around the same time.

5. AvalonMiner 821
   An impressive step up from the AvalonMiner 761, but with caveats
   Cost: $2,540 (£1,880) | Power usage: 1,200W | Hash power: 11 TH/s | Daily profit: 0.00143233 BTC
   Much greater hash power than the 761
   Energy efficiency is close to Antminer S9
   Currently can only be ordered in bulk

The AvalonMiner 821 is a huge improvement on its predecessor, containing 104 A3210 16nm chips, giving it a reliable hash rate of over 20% better than that of the AvalonMiner 761.
The 821 also has a power efficiency of 0.109 Joules per Gigahash, which is about 10% less than the Antminer S9 (at just under 0.098). As the hash rate is also lower than that of the S9, your decision on whether to choose the AvalonMiner 821 will probably revolve around price considerations.

References

Applications – SETI@home.” https://setiathome.berkeley.edu/apps.php. Accessed 20 Mar. 2018. Godfrey (2002). Andrews (2000), p. 291–292. Distributed Computing Dolev (2000), p. https://www.technologyreview.com/profile/christopher-mims/ “General-purpose computing on graphics processing units – Wikipedia.” “SAPPHIRE Radeon™ RX Vega64 8G HBM2 Limited Edition.” “ASIC – Bitcoin Wiki.” 29 May. 2015, https://en.wikipedia.org/wiki/Field-programmable_gate_array http://www.semi.org/en/scotten-jones-ic-knowledge-bio http://www.tsmc.com/english/dedicatedFoundry/technology/7nm.htm https://bitcoin.org/bitcoin.pdf