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Industrial Mining on Bitcoin Farms

05.03.2016 Seven years passed since the first Bitcoin had been mined. The virtual currency has risen through the ranks from total rejection and banning by banking systems of various countries and up to parity circulation in Chinese financial environment. In 2015 the European Equity Court made a decision that within the EU the virtual currency Bitcoin could be used for settlement on par with traditional currencies. After seven years Bitcoin occupied the niche among the world currencies, went up in price in comparison with dollar, so that today 1 ВТС costs $430.
More and more people, residents of the Earth, use cryptocurrency. They buy goods in online shops, settle bills, and transfer funds to other users. The virtual currency is not controlled by banking systems. Unlike traditional bank notes, we cannot touch Bitcoin. The analogues of mints for the cryptocurrency are Bitcoin mining farms.
Bitcoins differ from conventional money in several aspects:
  • Lack of centralized regulation;
  • Implementation of decentralized network Р2Р;
  • Operation principle is similar to P2P with no administrative center;
  • All the spectrum of work, including Bitcoin extracting, transaction processing and controlling, is carried out collectively (as a team);
  • Lack of emission of the virtual currency; it is extracted at Bitcoin mining farms;
  • Limited cryptocurrency issue;
  • Confirmation of Bitcoin deals is time-stretched, so receipt of funds takes up to 10 minutes;
  • Operations with Bitcoin cannot be cancelled, only recipient can send funds back.
Mining is limited with 21 million ВТС. In 2012 - 2015 each 10 minutes 25 Bitcoins were mined. In 2016 the number of created BTC will be halved.
Extraction of the virtual currency is called “mining”, from the verb “to mine”. Bitcoin mining is a process of creating ВТС through computer network on the basis of a vast number of calculations for resolving complex mathematical problems. Tasks are continuously getting more complicated, every two weeks, individually for each Bitcoin mining farm.
The computing system that consists of a myriad of individual computers performs numerous in-parallel calculations for resolving assigned tasks and is called a bitcoin farm. In the course of time there were three types of Bitcoin mining farms:
  1. Farms operating on graphic cards ATI (AMD) with graphics processor GPU. At the beginning of Bitcoin development these farms made a breakthrough in cryptocurrency mining, but due to increased complexity of assigned tasks, high power consumption and difficulties in providing farm’s equipment with cooling system they became unprofitable.
  2. Cryptocurrency farms based on FPGA modules were characterized with computing speed of GPU. Bitcoin mining required less energy consumption. FPGA modules generate less heat and do not require powerful cooling system. Farms of the second type are more compact and occupy less space than farms based on graphics cards; moreover, these farms are more reliable.
  3. Bitcoin farms built up from ASIC processors. ASIC chips have been designed specifically for Bitcoin mining. Operation speed of processors is so high that a farm generates Bitcoin 20-30 times faster than modular farms. The disadvantage of farms of this type is the equipment price, which influences its pay-back.
The third generation of farms has so much powerful equipment that these farms can be used only in industrial mining. Mono-miners can earn virtual currency uniting into cloud-pool.
 
Chinese phenomenon in development of industrial Bitcoin mining.

If to examine what a Bitcoin farm is and how it operates, you have to know that virtual cryptocurrency Bitcoin represents an analogue of gold with similar characteristics:
  • Extraction complexity;
  • Conditionally limited amount;
  • Materiality (at a specific moment can be owned only by a seller or a customer).
Bitcoin farms need for their operation a huge space, powerful cooling system and cheap labor force, cheap electric energy and seamless access to the Internet.  Thousands of processors united into frames work round-the-clock. The most advanced technologies are used for cooling, while extensive staff ensures smooth and uninterrupted performance of computer processors.
 It is possible to see how Bitcoin farms operate. In China there are industrial farms extracting cryptocurrency because this country offers favorable conditions for cryptocurrency mining.
In China electric energy is not expensive; before Bitcoin in some areas electric energy was in excess, even its production was unprofitable. Cheap electricity makes cryptocurrency production profitable. Besides, China offers cheap labor force, so labor costs in cryptocurrency farms are minimal.
Since China is the major manufacturer and supplier of electronic equipment for Bitcoin mining, so farms can purchase it at rather low price. Factories of the leading world brands specialized in electronics are located in China. However, there are also many local brands specialized in digital equipment that is next-best but at lower price.
Minimum prices for mining equipment depend on the fact whether the equipment is manufactured in the region and its price doesn’t include shipping and customs expenses. Equipment for mining farms is bought at the location of the farm and even produced custom-built.
Bitcoin mining contemplates implementation of any methods and technologies that reduce total expenses. China offers all prerequisites for successful development of this kind of business:
  • Inexpensive equipment is manufactured at the location;
  • Personnel, accustomed to carry out responsibilities honestly and thoroughly, can be of the lowest qualification and with accommodation at the farm’s territory;
  • Premises with low rentals (hangars and sheds) – that is why production was called “a farm”.
Since assigned task for Bitcoin mining becomes more and more complex, so miners face a problem of regular replacement of equipment for more efficient and more powerful ASIC processors. Farms’ owners necessarily invest part of their income into new production to avoid power loss in case of complication of a task. Old electronics is continuously updated; new hangars are built using new technologies that suggest quick construction from inexpensive materials. Huge amounts are invested in industrial safety and equipment maintenance. New hangars are constructed within 2-3 weeks.
The way how Bitcoin farms operate in China partially reminds of pitchwork: also mining but cryptocurrency instead of coal.
 
Cryptocurrency mining games for Internet-users

How can ordinary miners from all over the world earn if cryptocurrency mining switched to the industrial scale. One of the types of income for mono-miners is a possibility to unite into cloud-pools in order to extract virtual currency using rented from industrial companies equipment for mining. Members of a cloud-pool pay a rent for deployed equipment, but all expenses on equipment maintenance, energy and Internet costs are covered by the company – owner of the equipment.
Well, ordinary users may also play a Bitcoin-farm game where they may manage a small farm and receive a small amount of satoshi into their Bitcoin-wallets.
For cryptocurrency promotion games with satoshi-bonuses do not imply depositing personal finances. During registration process every player receives a bonus. With these funds players can buy animals and food. Moreover, for development of the farm it is possible to take the credit with interest 10%. Players can open game from time to time, fulfill the tasks and collect satoshi.
However, recently numerous new projects have appeared on the Internet: administrators of these games spend minimum amounts on purchasing script and provide a game with a module for entering Bitcoins (downloaded from free resources), then they accept currency for purchasing more profitable animals and foods but do not pay bonuses to players.
Therefore, before to begin playing Bitcoin farm, and especially depositing funds in the project, you have to check it via monitoring services and read players’ reviews. However, even after successful check-up, a project is not impervious to scam.
In recent years Faucet games and free faucets have become widespread. To receive a small reward, a player has to open a website, specify a number of his Bitcoin-wallet and unriddle a captcha. Some faucets require registration on the website with indication of e-mail address, login and password. Satoshi collection on free faucets is partially similar to BTC mining. It is interesting to play a faucet bitcoin farm – you have a chance to learn more about the virtual currency. When you collect a specific amount of satoshi, you can exchange it for real currency of your residence country or spend at online-shops that accept ВТС.