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If you were ever in a queue for 5 months to get your hands on the new Nvidia video card only to find out that someone swiped it off the shelf to mine Bitcoins right in front of you, you’ve only seen the beginning.

Since Bitcoin mining is a brute force operation, Intel has decided to optimize the process by releasing a new accelerator that would be geared specifically to mine Bitcoins, which would make it faster, more convenient and a lot more effective. Here are the more delicious parts of the patent:

“Bitcoin mining relies upon using brute force to repeatedly solve a series of SHA-256 hashing functions, and compare the result to a predefined threshold value. In one embodiment, if the output of the SHA-256 function is less than the threshold value, a new block is created and added to the blockchain. Because the software and hardware utilized in Bitcoin mining use brute force to repeatedly and endlessly perform SHA-256 functions, the process of Bitcoin mining can be very power-intensive and utilize large amounts of hardware space. The embodiments described herein optimize Bitcoin mining operations by reducing the space utilized and power consumed by Bitcoin mining hardware.

The Bitcoin mining operation may consist of two stages of Secure Hash Algorithm 256 (SHA-256) hashing to compress a 1024-bit message, followed by another round of SHA-256 hashing of the intermediate hash. The 1024-bit message consists of a 32-bit nonce that may be incremented every cycle. A valid nonce may be found if the final hash is less than a predefined threshold value. This may be verified by checking if the final hash contains a predefined number of leading zeros. The challenge for miners is to search through the entire nonce space in a brute force manner while minimizing energy consumption per hash and maximizing performance per watt.”

 

How it works

Bitcoin mining is famously power-consuming, creating more energy demand than 100 countries according to Digiconomiust and even causing blackouts. Mining takes colossal amounts of data and energy, which is getting even more resource-consuming as the process is picking up speed. For instance, the Proof-Of-Work structure which is used to add new blocks in the chain is quite expensive, and the procedure itself takes a lot of brute force computing and takes ages as well as diabolical amounts of processing power. It was only a matter of time before someone came out with a new, cool and comfortable solution, and who’s better than Intel?

Bitcoins have seen a few sharp drops in price, which as we have stated on numerous occasions, are all to do with the fact that the world’s infrastructure just isn’t ready to process such large volumes of data this fast. We have seen this four years ago when MTGox went down.

“The problems at Mt.Gox — lack of strong controls and tight regulation — are systemic to the Bitcoin industry. The reputational damage will spread,” – stated Mark Williams, a former Federal Reserve bank examiner – “What was the largest exchange is now a collapsed tower of toxic sludge.”

Some companies didn’t learn. On the 27th of December Bittrex also went down:

“We have received an enormous number of new account registrations over the past few weeks. Unfortunately, we have to make a few upgrades to our support and backend systems to handle the increased traffic and load.”

The same thing happened to CEX.io

“Every day, an enormous number of users registers on our exchange, which we are extremely excited about. At the same time, this has been putting additional pressure on our support and verification teams.”

And Bitfinex:

“Thank you for your interest in opening a Bitfinex account. However, due to extraordinary demand, new account creation has been temporarily paused.
Bitfinex focuses on serving professional traders. The reason we have decided to temporarily stop accepting new accounts is that we cannot undermine the quality of our services for our existing traders by flooding the system with new, small accounts.”

Why it works

Lack of vertical scalability is a serious issue in terms of mining and blockchain in general. As demands increase, a new set of miners are turning up with decidedly more serious needs for hardware that would be able to meet their expectations.

Intel’s offer is to introduce new algorithms that would allow reducing energy input to do with hashing operations by using SHA-256 message digests. The patent describes the urgency of needing to create a more effective design:

“As opposed to physical currency systems backed on natural resources (e.g., gold), Bitcoins may be created by using software and hardware systems to solve a series of mathematical algorithms (e.g., Secure Hash Algorithm 256 (SHA-256)). When the Bitcoin mining algorithms are solved in a way that satisfies certain predefined conditions, a new block is added to the blockchain and a certain number of Bitcoins are awarded to the miner; thereby introducing new Bitcoins into the eco-system. Bitcoin mining algorithms are inherently difficult to solve, and thus require large amounts of processing power. Because of a large amount of power utilized, and the relatively high cost of that power, mining Bitcoins can be a very costly endeavor. In some embodiments, the cost to mine a single Bitcoin may exceed the value of the mined Bitcoin.”

With increases in productivity, it is possible that the world will be better equipped to handle Bitcoin mining and be better ready for blockchain in general, which means we may be seeing a lot more of blockchain and mining in the future. With lack of vertical scalability problems and adequate energy consumption, the world can look at effectively employing the new tech so that it can benefit the humankind in a variety of ways, hopefully, all of them benevolent.

Image courtesy of Dreamstime.com

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