What does Bitcoin mean? How to mine with graphics card?

The Origin of Bitcoin

If you want to fully understand the origin of Bitcoin, you have to mention the existing financial system.

As we all know, currency itself has no value. At first, humans used barter to trade, but there were many inconveniences and it was difficult to exchange for the items they needed. So currency came into being. Through currency as an intermediary, different items can be priced according to their rarity and the transaction process can be simplified.

Although currency trading has many benefits, it also has a fatal drawback, which is centralization. The current currency 100 in the world is issued or abolished by the central bank of the country. Ordinary people cannot participate in currency issuance or central bank accounts. If the central bank continues to issue currency, it will continue to dilute the currency in people's hands and reduce the purchasing power of currency.

In order to solve this problem, Satoshi Nakamoto, the father of Bitcoin, proposed the concept of decentralization in 2009, which means issuing currency on open source software and building a P2P network on it to create a decentralized payment system. Many readers see this and don’t understand. What is decentralization? What is a P2P network?

Let’s take the popular WeChat payment in China as an example. Although WeChat and Bitcoin are both virtual payment systems, every transaction on WeChat must be carried out in the banking system, and the bank is the center of WeChat payment. Decentralization means peer-to-peer transactions, not affected by any other factors.

P2P network is easier to understand. P2P is the abbreviation of peer-to-peer, which is "partner to partner", also known as peer-to-peer network. For example, if you download a movie through iQiyi, you are transferring the movie to your computer from the iQiyi server; and if you download a movie from a P2P resource, you are downloading it from the computers of other P2P users who already have the movie resource. And if other P2P users need this resource, they can also download it from your computer.

Bitcoin is like this movie. It does not exist in a central server like a central bank, but exists in hundreds of millions of computers in the world. Since its issuance, in theory, no one can control the number of Bitcoins, nor can it artificially manipulate the currency value by manufacturing Bitcoins in large quantities. The design based on cryptography allows Bitcoin to be transferred or paid only by the real owner, with excellent security.

How is Bitcoin produced?

First, let’s learn about “blockchain”. The core principle of Bitcoin is “blockchain”. Each block corresponds to a bill. Linking all blocks is the blockchain. , any transaction information and transfer records are recorded in the blockchain. It is important to note that the blockchain exists throughout the Internet, so any Bitcoin holder has no fear of losing their Bitcoin.

At every other point in time, the Bitcoin system will generate a random code on the system node. All computers on the Internet can look for this code. Whoever finds this code will generate a block. Then you get a Bitcoin. This process is what people often call mining. Calculating this random code requires a lot of GPU computing, so miners purchase massive graphics cards to earn Bitcoin profits more quickly. This is also an important reason for the recent shortage of graphics cards.

Some people say that if there are more and more Bitcoins, won’t they eventually be completely worthless? Of course, Satoshi Nakamoto also thought about this problem. There is another mechanism in the Bitcoin system: that is, the total amount of Bitcoin is limited. In the first four years, the total amount will be 10,500,000 BTC, and the output amount will be halved every four years. In years 4 to 8, 5,250,000 BTC will be generated, in years 8 to 12, only 2,625,000 BTC will be generated, and so on. By the end, the total number of Bitcoins generated was close to 21,000,000 BTC.

To answer the latter question, tell me what I know.

Why use a graphics card for mining? Because it requires a large amount of data calculations (the size of the bill database that needs to be downloaded has exceeded 20 G), the CPU speed of a single motherboard is too slow, and the calculation does not require additional redundant displays, so it is necessary to use more than a dozen high-end Graphics cards are connected in parallel to perform calculations. There are ready-made mining machines for sale online. However, the current situation is that the mining machines fall behind after more than ten days and need to be updated. ----------The reason is that the mining speed is fast. In order to ensure that the number of Bitcoins generated around the world remains unchanged every day, the program will automatically increase the difficulty of data calculation, and your calculation tools will lag behind. The biggest problem with combined graphics card mining machine computing is also the mining cost, which is electricity. Machine operation and computer room cooling consume a lot of electricity, and the electricity bill is astonishing. Nowadays, dozens of miners jointly rent the site and usually set up the factory near the Southern Hydropower Station. The reason is that the power station can generate electricity by discarding water. Since the cost of not being connected to the power grid is very low, the electricity price is low, and the people in the power plant can make extra money.

The official said this:

The concept of Bitcoin (BitCoin) was first proposed by Satoshi Nakamoto in 2009. The open source software designed and released based on Satoshi Nakamoto’s ideas and its construction on the P2P network. Bitcoin is a P2P form of digital currency. Peer-to-peer transmission means a decentralized payment system.

But how to put it simply? I'm ignoring a lot of complicated knowledge here just to give you a simple understanding. If you want to go deeper, you need to read a book.

But if you want to understand it in a few hundred words, it is impossible.

Simple version:

Bitcoin is a virtual currency. Bitcoin relies on blockchain technology.

We first need to understand what is blockchain? Is it a distributed ledger? How to distribute? Suppose you have a ledger that records the transactions of this community in the past ten minutes. Ten minutes later, another person will copy your account book and update and record the new transaction of the past ten minutes. By the way, he will tell you the new record just now and let you record it in the book. Every ten minutes, a new person comes and opens a new ledger.

If you want to modify the ledger, you need to get the consent of more than half of the people, which is basically impossible. At the same time, it doesn’t matter if your ledger is lost, because other people’s are still there.

So why do you need to keep accounts for them? Because if you keep accounts, you will get income. Every time you get the right to keep accounts, you will get Bitcoin.

So Bitcoin is the virtual currency of this network.

What is mining? Just to compete for accounting rights. Its principle is simple, using the proof-of-work principle. Multiple miners run machine operations to find a suitable hash code. The fastest to get the appropriate hash code wins.

The hash code can only be obtained through enumeration. The parallel computing capability of the graphics card is very powerful and suitable for this kind of operation, so miners use graphics cards to mine.

The madness of Bitcoin continues.

After experiencing the hard fork in early August, Bitcoin was like a chicken blood, and once again started the "rocket liftoff" mode. It has continued to soar directly from 19,050 yuan on August 1, and the current price has risen to 29,500 yuan (price on Jubi.com). The cumulative increase in two weeks has been very close to 50.

In this process, people are still repeating the two questions that have been asked for almost 8 years: How high can Bitcoin rise? When will the next Bitcoin crash occur? But past facts have also proven that regardless of whether they are pessimistic or optimistic, almost everyone who answered these two questions has been slapped in the face.

But there is a basic question that can still be asked. What is the main reason for Bitcoin’s “rocket liftoff” this time?

Scarcity is still the foundation

The author noticed that as the source of the whole wave of "virtual currency" trend, as well as blockchain, virtual currency Currency operating rules and other corresponding systems have become the first point of reality. Bitcoin, which was born in 2009, is still "scarce" compared to traditional finance.

This includes the blockchain technology itself, the mining system settings of Bitcoin itself, and even the market scale advantage that Bitcoin occupies due to its first appearance in the entire "virtual currency" trend. You can even say this - virtual currencies can be divided into two categories, one is Bitcoin and the other is not Bitcoin.

This scarcity, which is independent of the traditional financial system, is like a magnet, constantly attracting more people to invest money into this "melting pot". Their reasons may be speculation, experimentation, or even gambling.

The author also discovered that Ronnie Moas, a researcher from the market research organization Standpoint, published a 122-page research report specifically for this purpose. His own conclusion is: Before 2018, that is, in less than 5 months left, Bitcoin will reach 33,370 yuan, which is approximately $5,000. The reason given by Moas is also very simple: "The total value of all stocks, bonds, gold and cash in circulation in the world currently exceeds 200 trillion US dollars, a small part of which will eventually enter the market of Bitcoin and other virtual currencies through various methods. .” Based on this reason, he also gave a possible valuation of the final Bitcoin market in the future-2 trillion US dollars. Currently, this number is only US$56 billion, a gap of 35 times based on this estimate. Moas even described the current Bitcoin market this way: "We are watching a 90-minute football match, but in fact it has only started for 15 minutes."

In addition to scarcity, what other reasons are there?

After scarcity is established, what determines the price fluctuation of Bitcoin is the asset, or the "degree" of people's investment behind the asset. The popularity in search engines can be said to be is the best indicator.

Foreign Bitcoin player Chris Burniske combined the price trend of Bitcoin with Google Trends (Google search popularity index), and then found a very interesting result: when more and more people search for " "Bitcoin", the price of Bitcoin will also increase accordingly. And the correlation between the two is growing.

Some short-term reasons may also be taken into account:

It has skyrocketed, but is it far behind?

Just like a seesaw, various artificially intervened financial systems will have their own volatility. All kinds of surges are often followed by crashes.

Burniske also gave an indicator of his own: If the price of Bitcoin doubles within 30 days, then this period can be directly called a "bubble period." According to this indicator, Bitcoin's price growth in the past month has actually reached 215, which is undoubtedly a "bubble period."

Will these patterns appear in the next period of time? No one knows. But judging from the increase of nearly 400 since April this year, the possibility of Bitcoin’s rapid decline is still increasing. And this fall will definitely become the one with the greatest impact

In the vernacular, get some useful information!

Explain clearly at once the meaning of the so-called distributed accounting system and blockchain.

Mining is not about mining ore, it is about computing power, trial and error, and safety.

Where does the value of Bitcoin come from? Will the bubble burst?

Keywords: accounting, block, calculation, value, knowledge, trust, bubble.

First, illusory, genius ideas, innovative accounting

What exactly is Bitcoin? It’s a person named Satoshi Nakamoto. Of course, we don’t know who this person is. I don’t know if it’s one person or a group of people. He came up with an idea, a completely new idea.

Everyone should have heard this sentence. Bitcoin is a distributed accounting system.

What does it mean? Distributed is compared to centralized accounting. What is a centralized accounting system? That is a system like a bank. You transfer the money in your bank card to Zhang San, so the bank will make an accounting record in its information center. You transfer a sum of money to Zhang San. , this is called a centralized accounting system. Only the center can remember, others cannot.

What is a distributed accounting system? A distributed accounting system means that everyone can record it, you can record it, and I can record it, and everyone must package all transaction records into it within a period of time. Bitcoin’s algorithm stipulates that accounts should be recorded every ten minutes.

Every time you type a package for accounting, this package is equivalent to a block. After you type this package, others will generate the next block in the next ten minutes, and then receive your Above the block, think about it, does it look like a chain, a series of chains, like a so-called blockchain, used to record data? As long as the chain is long enough, it constitutes a so-called blockchain.

There are two questions at this time. First, why do people package blocks? Second, how to ensure security and what to do if there are false or incorrect accounts?

The first benefit of packaging blocks is that you can get rewards. This reward is the so-called Bitcoin. In fact, it is also illusory, just an idea. This number will be halved every four years, so overall, the total number of Bitcoins will be approximately 21 million.

The second is how to ensure that the accounting records are correct and how to ensure that there are no false or incorrect accounts. This is because his accounting is traceable and competitive.

If you make a mistake, you overpay or you make a mistake. Later, other people's accounts will not match yours, and you will be exposed. Probably in this way, the security and accuracy of Bitcoin are guaranteed. Then the longest chain s on the entire Internet is accurate, authentic and safe. This is the benefit of distributed accounting, and no one can tamper with it.

Having said so much, to sum up, Bitcoin is a reward you get. This reward is what you get from doing module accounting in distributed accounting. At the same time, due to the block The connectivity, openness, competition and computing power security of mathematical equations, then you can ensure the accuracy of this accounting method and the security of Bitcoin.

Second, mining is actually about solving problems

What exactly does mining mean? We just talked about the basic principles of Bitcoin, the number of Bitcoins, the accounting method of Bitcoin, and the security of Bitcoin. Now we want to talk about who is qualified to keep accounts. This is what mining means.

Who is qualified to keep accounts? The answer is someone who can calculate math problems. This is what mining means. When you solve a system of equations, then you can keep accounts. Note that this system of equations is very difficult to calculate. It is a method called haha. Greek equation stuff.

The characteristic of this kind of equation is that you can find y if you know x, but you know that y cannot solve x, so how can you know x?

That is to try one by one. This is the meaning of mining. Mining does not refer to holding a hoe, but refers to the computing power of the computer. The CPU tries the speed of the numbers one by one.

To put it simply, if you can calculate a solution, you are qualified for packaging. What happens after you package the data? Announce it to the entire network, no problem, you can get Bitcoin rewards, so you can either say that Bitcoin is the solution to the system of equations, or you can say that Bitcoin is these rewards, it almost means the same thing.

Third, the source of value, everyone’s trust

I once wrote an article to remind everyone to buy Bitcoin at 16,000 or 17,000 US dollars. Now when I look back, I don’t think so. I was shocked. It has risen to 29,000. Many people are asking me why Bitcoin is so valuable. Where does the value of Bitcoin come from? Isn't he just a fictitious idea?

The value of Bitcoin comes from several aspects.

The first is safety, the second is awareness mechanism, and the third is scarcity of quantity.

The first one is based on my previous introduction. Everyone found that it is difficult to crack Bitcoin, and it is also difficult to make mistakes, because the hash equation is difficult to solve. You have this computing power, then you can perform such packaging. At the same time, you can also avoid accounting errors when packaging, so that its security is very high. When something is not easy to make mistakes, it has a basis for value. Trust is the basis of all values. When you cannot tamper, when you are very correct, when you are highly skilled, people will trust you.

This is like the earliest calculus. Although it is also an illusory thing, you can use it to calculate acceleration, calculate margins, and solve precision calculation problems in life. So although this thing is It has no physical form, but it is also very valuable. If you learn how to do it and get into a good university, you can also make money.

For another example, many people say that Bitcoin, a currency, is not backed by national credit. Why does it have the opportunity to become a currency or investment product?

The key is that its trust comes from technology. Think about it, why planes can fly in the sky? Is it because of the country’s credit guarantee? No, it’s because of fluid mechanics, the support of aerodynamics, and scientific knowledge. Science is a methodology brought by the underlying logic, and its credit value is also very high. It does not even require the guarantee of national credit.

The second is the scarcity of quantity. Bitcoin rewards will be halved every 4 years, and the total number of Bitcoins is only 21 million. The source of value of something is roughly two parts. The first is to Scarcity, the second is that everyone wants it and everyone trusts it.

For example, it is impossible to sell instant noodles at a high price, because you can only eat five packs a day, and I can produce 20 packs a day. So how can this kind of thing be valuable? As for diamonds, do you think diamonds are very useful? That's about it, but because it's scarce, rare. Then everyone will think he is valuable.

The third is the consciousness mechanism, which means that many people must believe in him and many people want him. Think about it. There aren't many eggs with three yolks, and there aren't many toads with one eye. Why don't people want them? Or is the value not that high?

This is a kind of consciousness mechanism. Speaking of this, I remembered the first time I drank beer. It tasted like horse urine. It was so unpleasant that I felt like vomiting. We all called it swill.

But now, due to the deception of various advertisements, and because everyone talks about how cool it is and how malty it tastes, I tell the truth, it is not as delicious as Coke. But with constant stimulation and constant formation of different ideas, his value is revealed. To put it bluntly, when everyone says he is right, he may really be right.

Fourth, will the Bitcoin bubble burst? When will it burst?

First of all, I want to say that bubbles have the same meaning as value within a certain period of time. You say that Bitcoin is not worth the money, but it has been rising higher and higher for many years. If you are saying that it is a bubble, then it is meaningless.

In the longer term, humans will destroy the earth and explode, and all good things will cease to exist, but not everything is a bubble. Obviously we can't look at it this way. Again, within a period of time, value means bubble.

When will the Bitcoin bubble burst? Of course he will break, but there will be strict logic and reasons for the break.

Then we have to start with what I just mentioned about the source of Bitcoin’s value, such as its consensus mechanism, people’s trust in it, and everyone thinks it will rise. This belief and investment value.

When will this value break? For example, if someone can crack Bitcoin, for example, if Bitcoin accounting is no longer safe and can no longer provide everyone with a scarce means of preservation, then the Bitcoin bubble will burst.

Another situation is that people’s pursuit of Bitcoin changes to other things. For example, if there are other technological innovations, everyone can use funds, resources, and liabilities to buy other things. If investment in newer technology products yields higher returns, then Bitcoin may be competed away and its bubble will burst.

Many people criticize Japan’s housing price bubble for bursting, but they don’t know that after Japan’s economy declined, other countries in Asia are also rising, especially the rise of China, which means that funds no longer need to stay in Japan. Instead, they can go overseas to make money, which has led to Japan’s housing price bubble.

In a word, the bubble will either burst because of its own flaws, or there will be something better to compete with it, and it will not burst by itself. When something surpasses Bitcoin, and when Bitcoin's own flaws are discovered, the Bitcoin bubble will burst.

Conclusion. Bitcoin is actually a genius idea, a distributed accounting system and a method of reward. It is highly secure, not easy to crack, and has scarcity.

Mining actually means trying to calculate a system of equations with numbers. Mining ability is actually your computing power. This is just a metaphor. When you are rewarded for mining, you can get corresponding Bitcoin rewards, Bitcoin, mining, digital currency, and blockchain. These things have no physical form in essence, they are just genius ideas.

The value of Bitcoin comes from people's knowledge mechanism, from people's trust in technology, and from its own scarcity. If you believe it, there is it, if you don’t believe it, there is nothing. If everyone believes it, then it is right.

In order for this bubble to burst, either he has serious problems and is captured by others, or there is something better that can compete with it and form a stronger ** If you understand the mechanism, the technology will be more advanced, and the income will be higher, then this bubble will burst. Otherwise, in any period of time, bubbles have the same meaning as value.

Bitcoin is a virtual currency, and its total amount is set from the beginning, so there is no inflation.

Bitcoin is like ore, buried in mountains of data. You need to use a computer to develop Bitcoin. The better the graphics card, the better the performance of your computer, and the higher the mining efficiency. But Bitcoin is like ore. The more it is mined, the less it is. It takes more time to calculate the mining, and the investment cost is getting higher and higher. If you are a novice, it is recommended not to mine Bitcoin, just buy Bitcoin and wait for the appreciation. What?

Bitcoin is a virtual currency.

It is a P2P form of digital currency. Peer-to-peer transmission means a decentralized payment system. Unlike most currencies, Bitcoin does not rely on the issuance of a specific monetary institution. It is generated through a large number of calculations based on a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. And use cryptography design to ensure the security of all aspects of currency circulation.

Design based on cryptography allows Bitcoin to be transferred or paid only by the real owner.

This also ensures the anonymity of currency ownership and circulation transactions. The biggest difference between Bitcoin and other virtual currencies is that its total quantity is very limited and it is extremely scarce. The currency system had no more than 10.5 million coins in 4 years, after which the total number will be permanently limited to 21 million coins.

Bitcoin can be cashed out and converted into the currencies of most countries. Users can use Bitcoin to purchase some virtual items, such as clothes, hats, equipment, etc. in online games. As long as someone accepts it, Bitcoin can also be used to purchase items in real life. Bitcoin mining

Bitcoin is generated by mining. In layman’s terms, Bitcoin mining is to use your hardware equipment to calculate the mathematical problems of the SH265 algorithm, confirm network transactions, and ensure the security of the entire network system. , as a reward, the Bitcoin system will give certain Bitcoin rewards based on the amount of computing power contributed by miners. Bitcoin mining has gone through three stages (CPU, GPU, ASIC)

CPU: It uses our ordinary computers for mining.

GPU: It is to use the graphics card for mining, which is what I often call mining by burning the graphics card.

ASIC: ASIC is an integrated circuit designed specifically for Bitcoin mining. Since Avalon produced the world's first ASIC mining machine in 2012, Bitcoin mining has been completely subverted. At present, it has entered the ASIC professional mining stage, and the Avalon mining machine has been updated to three generations. It is said that the fourth generation of Avalon chips will be released soon.

Some developed countries in the West have a relatively relaxed attitude towards Bitcoin, while developing countries are relatively strict. China currently only recognizes the commodity attribute of Bitcoin, but does not recognize the currency attribute of Bitcoin. Since Bitcoin transactions are difficult to track, Bitcoin may be used for illegal activities such as money laundering and terrorist financing. Therefore, most countries remain cautious about Bitcoin.

Let’s talk about something simple and easy to understand.

Bitcoin’s mining knowledge mechanism is POW, which is proof of work. Bitcoin miners determine who will lead the new block by calculating the hash value. At this time, The difference must be reflected by the proof of work. The hash value of Bitcoin is that each machine can calculate a value at a time, but this value is not necessarily the most consistent with the standard, so whoever calculates the most times per unit time has it. The greater the chance.

Graphics cards provide computing power, and a large amount of calculations can give you more possibilities, which is why people are crazy about buying mining machines and must join a mining pool to mine. Hubox Research Institute - brings you the simplest blockchain knowledge.

1. Bitcoin itself is a perfectly packaged virtual currency. 2. The purpose of Bitcoin is to secretly enter the destination country or region through open Bitcoin transactions. Loot it without supervision, and then go quietly through Bitcoin transactions on the surface. This is a clever species invented by clever people. 3. With this premise, the price of Bitcoin exchange for real currency must be high, otherwise huge fund transfers cannot be achieved. Therefore, Bitcoin continues to rise under the guidance of human and material inducements. 4. Even if platform trading is completely banned in China, it will definitely continue abroad because not all countries have discovered problems. If you can’t cheat you, you can still cheat others. It is completely feasible for you to take the hard-earned or copied Bitcoins to trade abroad. The virtual currency must be returned with real money. After all, the supervision of real money is more mature than the supervision of virtual currencies. [Cool][Cool]