The bitcoin logo (Photo credit: Wikipedia)
A couple of days ago I started reading about BitCoin. I don’t really know what, I think it may have been after coming across yet another news article on it.
Nevertheless, it lead me into an interesting world of HashCash, cryptography, prime numbers, mining, ASIC‘s and more artificial currencies than I imagined.
Having done virtually no reading on BitCoin before and having almost nothing to do with it (though I have a vague suspicion I may have setup a wallet years ago that is now long gone), I was surprised at just how much people are spending on it and how much of an industry has sprung up around mining it.
ASIC’s are application specific integrated circuits. These are designed specifically for mining BitCoin. Crazy stuff.
BitCoin is mined by utilising your processing power to process and verify BitCoin transactions. If you are lucky, you might unlock a block of coins in the process. Due to the high volume of some miners, particularly those invested in ASIC’s, its become difficult to get anywhere mining on your own. This has lead to pools, that pool resources and split the profits in a variety of ways.
On from here I began discovering other crypto-currencies based on BitCoin’s open source platform, most with variations of some kind or other.
LiteCoin seems to be one of the larger competitors and uses Scrypt cryptography instead of HashCash and PrimeCoin is based around prime number calculations.
I’ve had a little bit of a play with mining different currencies as well to see what was involved and if it is worthwhile bothering on a small scale (keeping in mind that mining on a standard computer runs your CPU and/or GPU quite intensively depending on the type of coin).
Having mostly Mac computers, I’ve had a play with two mining programs, Asteroid and Mac Miner. Both seem to work quite well but Asteroid has a nicer interface. Asteroid does not work below OS X 10.8 and Mac Miner doesn’t work very well below 10.7. Both seem to run well on later versions of OS X though. I just need to get round to upgrading the Mac Pro from 10.6.8. One other thing to note is that BitCoin is not worth mining at all on a CPU anymore, however, some of the others such as LiteCoin and PrimeCoin are.
Based on my reading so far, it seems to me that the crypto-currencies of most interest in no particular order are:
DogeCoin is a meme based currency setup as a joke I believe, but it appears to have grown quite rapidly. PrimeCoin is based on PeerCoin, and both are more focused on CPU mining at this time and have taken a bit of an innovative approach using prime number calculations.
LiteCoin appears to be the second largest after BitCoin and currently still much easier to mine on a hobby level than BitCoin with the Scrypt method intended to discourage ASIC development (though it sounds like they are in the works anyway).
At the end of the day though, these coins are all schemes, artificial currencies that have value purely because people are willing to assign value to them. So whether one will grow or not is dependent on how many people are willing to use it.
It’s interesting, but I keep coming back to: It’s not real money. It can be exchanged for money, goods and services, as long as people continue to assign a value to it. It may be the future of currency and “real money”, it may not. It’s constantly changing though.
Overall, I think it’s fascinating, exciting and potentially a waste of time, but you never know
Some interesting links:
- Crypto Coin Charts List – Values, trading volumes of many crypto-currencies.
- Triple-Mining Pool – A mining pool for BitCoin that seems to work relatively well for hobby miners with some extra features.
- My Triple-Mining Mini Pool - In case you would like to join it
- P2Pool - Has pools available for just about every type of coin along with graphs available to show the success rates.
Do you mine any of these coins, or any others? I’d love to hear your thoughts on them!