[silk] Bitcoin

[Alaric Snell-Pym]

On 05/17/11 11:15, Suresh Ramasubramanian wrote:
> Alaric Snell-Pym [17/05/11 11:06 +0100]:
>> Ah, the limit isn't done like that. 50 bitcoin are generated about every
>> 10 minutes, period. The more CPU time you put in, the larger a *share*
>> of that you get, but the global rate remains the same.
>
> the more CPUs you put in?
>

Well, the more CPU *time*.

Technically, to mine bitcoin, you're racing to be the first to find a
number that, when combined with the details of a bunch of pending
transactions with a complicated function (SHA-256, for the tecchies out
there), is less than a target.

So you set your CPU trying random numbers, feeding them along with a
heap of pending transactions into SHA-256, and seeing if the output is
below the target.

If it is, you advertise that fact to the network, and you get to spend
50 bitcoin as you see fit.

However, it takes something like 2^47 attempts (each attempt is called a
"hash") to find an output below the target. My MacBook pro can do about
a million - 2^20 - per second, meaning it'd take 2^27 seconds, or about
1500 days, to find one. On average. I might get lucky and find one right
away. Or I might not, and take five times that long.

So if I put twice as many CPUs in, I could do it in about half the time
(on average). Either way, for my kind of CPU, it takes about 1500 days
of time to "win a block". If I split that between 1500 CPUs, I can win a
block a day! As the system adjusts the difficulty of the target so that,
on average, six blocks are won per hour, one per day would give me 1/144
of the entire creation rate of new bitcoins...

In practice, the "miners" (people who set out to win blocks) don't use
CPUs; they use GPUs (as found on video cards). Certain brands of GPU
(ATI ones, it seems) are good at the maths required for SHA-256, so they
put loads of graphics cards into their PCs and set them trying out
random numbers until they get a 'win'.

Even then, it'd still take them weeks... so what most do is to join
"pools" and get their systems to cooperate with others. The pool
measures how much they're contributing, by them sending the pool
evidence of near-misses (results they get that approach the target, but
don't make it), by which the pool works out how much CPU time each
member is putting in; when somebody in the pool wins the block, the
money goes to the pool (and the pool can check that!), so the pool
splits it proportionally by how much CPU time was contributed.

Really, it's all like a lottery; and the miners get their systems
entering the lottery a billion times per second.

Currently, the bitcoin network produces about 1.5 trillion hashes per
second, total. So somebody managing a billion a second, in a mining
pool, earns about a 1500th of the total "income" of new bitcoin - 50
every ten minutes...

ABS

--
Alaric Snell-Pym
http://www.snell-pym.org.uk/alaric/

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