Nov 30

Astonishing new mining operation in Hong Kong

Maybe you have been considering trying your luck at mining some bitcoins. As more and more people get involved in mining and more bitcoins are found the computing power required to effectively mine bitcoins is becoming increasingly more complex. Some people are attempting to distribute the problem across thousands of machines across the internet using mining pools and others are building huge machines specifically for the purpose of mining. The images below are of the huge new secret mining facility of ASICMINER based in Hongkong.

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The mining facility is located in an industrial area in Hong Kong and are composed of many standard racks, the kind you would find in a standard data centre. Each of the racks contains three sealed liquid glass tanks. There are are blades operating quietly in the liquid whist switchers hang above.

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With the air conditioning turned off the place would be incredibly quiet.

3

The immersion cooling technology is now very mature and much of this equipment is bespoke, designed specifically for the ASICMINER operation. Their earlier versions had many external interfaces and was equipped with a heat sink. However, these days the new blade PCBs have been massively improved in order to optimise the cooling effect of the liquid heat transference system. These are the same systems used to cool many super computer systems.

4

Currently each liquid tank can accomodate 92 blades – this will probably increase in the future. Each cooling pipe can consume upto 25Kw of energy (a standard kettle uses around 3KW)

5

After being loaded with liquid each tank weighs around 200kg. The liquid maintains an output temperature of around 37 degrees celsius. It is a low pressure system to keep it as cheap as possible whilst maintaining best performance and reliability. You will find similar liquids in the cooling systems of major financial institutions data centres and it is also fire retardant.

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Stability is key in this mining operation and all cooling machines and pumps have built in redundancy. There are also 3 separate internet uplinks built into the system to ensure there is no one single failure point.

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As of today the farm has not yet become fully operational – some of the racks are still waiting to be brought online. Possibly with a new generation of chips from ASICMINER.

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This system has been built for large scale deployment worldwide – just connect it to a power supply, give it an internet connection and it can go. In a cold environment this system could even be used to provide heating for offices. However, I suspect this will not be the case in Hong Kong.

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So if you still fancy having a go at mining you may well need to up your game. I personally am just going to try and make some cash playing the secondary bitcoin market. It seems like it might be a little bit easier.

You have to admit – they do have an amazing rack.

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Nov 29

Where might bitcoins be in 3 months time?

Bitcoins have recently been increasing exponentially in price – often by over 5% a day. Of course it could all go wrong – but what would happen if we saw 1% appreciation a day for the next 3 months? Below is a little table showing what would happen if the current trend continues.

Date Price GBP Price USD
01/12/2013 £800 $1309
02/12/2013 808.00 1,322.09
03/12/2013 816.08 1,335.31
04/12/2013 824.24 1,348.66
05/12/2013 832.48 1,362.15
06/12/2013 840.81 1,375.77
07/12/2013 849.22 1,389.53
08/12/2013 857.71 1,403.43
09/12/2013 866.29 1,417.46
10/12/2013 874.95 1,431.63
11/12/2013 883.70 1,445.95
12/12/2013 892.53 1,460.41
13/12/2013 901.46 1,475.01
14/12/2013 910.47 1,489.76
15/12/2013 919.58 1,504.66
16/12/2013 928.78 1,519.71
17/12/2013 938.06 1,534.91
18/12/2013 947.44 1,550.25
19/12/2013 956.92 1,565.76
20/12/2013 966.49 1,581.41
21/12/2013 976.15 1,597.23
22/12/2013 985.91 1,613.20
23/12/2013 995.77 1,629.33
24/12/2013 1,005.73 1,645.63
25/12/2013 1,015.79 1,662.08
26/12/2013 1,025.95 1,678.70
27/12/2013 1,036.21 1,695.49
28/12/2013 1,046.57 1,712.45
29/12/2013 1,057.03 1,729.57
30/12/2013 1,067.60 1,746.87
31/12/2013 1,078.28 1,764.33
01/01/2014 1,089.06 1,781.98
02/01/2014 1,099.95 1,799.80
03/01/2014 1,110.95 1,817.80
04/01/2014 1,122.06 1,835.97
05/01/2014 1,133.28 1,854.33
06/01/2014 1,144.62 1,872.88
07/01/2014 1,156.06 1,891.61
08/01/2014 1,167.62 1,910.52
09/01/2014 1,179.30 1,929.63
10/01/2014 1,191.09 1,948.92
11/01/2014 1,203.00 1,968.41
12/01/2014 1,215.03 1,988.10
13/01/2014 1,227.18 2,007.98
14/01/2014 1,239.45 2,028.06
15/01/2014 1,251.85 2,048.34
16/01/2014 1,264.37 2,068.82
17/01/2014 1,277.01 2,089.51
18/01/2014 1,289.78 2,110.40
19/01/2014 1,302.68 2,131.51
20/01/2014 1,315.71 2,152.82
21/01/2014 1,328.86 2,174.35
22/01/2014 1,342.15 2,196.09
23/01/2014 1,355.57 2,218.06
24/01/2014 1,369.13 2,240.24
25/01/2014 1,382.82 2,262.64
26/01/2014 1,396.65 2,285.27
27/01/2014 1,410.61 2,308.12
28/01/2014 1,424.72 2,331.20
29/01/2014 1,438.97 2,354.51
30/01/2014 1,453.36 2,378.06
31/01/2014 1,467.89 2,401.84
01/02/2014 1,482.57 2,425.85
02/02/2014 1,497.40 2,450.11
03/02/2014 1,512.37 2,474.61
04/02/2014 1,527.49 2,499.36
05/02/2014 1,542.77 2,524.35
06/02/2014 1,558.20 2,549.60
07/02/2014 1,573.78 2,575.09
08/02/2014 1,589.52 2,600.84
09/02/2014 1,605.41 2,626.85
10/02/2014 1,621.46 2,653.12
11/02/2014 1,637.68 2,679.65
12/02/2014 1,654.06 2,706.45
13/02/2014 1,670.60 2,733.51
14/02/2014 1,687.30 2,760.85
15/02/2014 1,704.18 2,788.46
16/02/2014 1,721.22 2,816.34
17/02/2014 1,738.43 2,844.51
18/02/2014 1,755.81 2,872.95
19/02/2014 1,773.37 2,901.68
20/02/2014 1,791.11 2,930.70
21/02/2014 1,809.02 2,960.00
22/02/2014 1,827.11 2,989.60
23/02/2014 1,845.38 3,019.50
24/02/2014 1,863.83 3,049.70
25/02/2014 1,882.47 3,080.19
26/02/2014 1,901.29 3,110.99
27/02/2014 1,920.31 3,142.10
28/02/2014 1,939.51 3,173.52
01/03/2014 1,958.91 3,205.26

As you can see that even with modest growth (considering it’s recent performance) Bitcoins will be worth more than double in less than 3 months. The recent media frenzy has only served to push prices higher. Even when the publicity is negative it seems to be having a positive effect. If you increase the growth rate to 5% then the chart looks a whole lot more impressive. Look at these numbers:

Date Price GBP Price USD
01/12/2013 £800 $1309
02/12/2013 808.00 1,374.45
03/12/2013 848.40 1,443.17
04/12/2013 890.82 1,515.33
05/12/2013 935.36 1,591.10
06/12/2013 982.13 1,670.65
07/12/2013 1,031.24 1,754.19
08/12/2013 1,082.80 1,841.89
09/12/2013 1,136.94 1,933.99
10/12/2013 1,193.78 2,030.69
11/12/2013 1,253.47 2,132.22
12/12/2013 1,316.15 2,238.83
13/12/2013 1,381.95 2,350.78
14/12/2013 1,451.05 2,468.31
15/12/2013 1,523.60 2,591.73
16/12/2013 1,599.78 2,721.32
17/12/2013 1,679.77 2,857.38
18/12/2013 1,763.76 3,000.25
19/12/2013 1,851.95 3,150.26
20/12/2013 1,944.55 3,307.78
21/12/2013 2,041.78 3,473.17
22/12/2013 2,143.86 3,646.83
23/12/2013 2,251.06 3,829.17
24/12/2013 2,363.61 4,020.62
25/12/2013 2,481.79 4,221.66
26/12/2013 2,605.88 4,432.74
27/12/2013 2,736.17 4,654.38
28/12/2013 2,872.98 4,887.09
29/12/2013 3,016.63 5,131.45
30/12/2013 3,167.46 5,388.02
31/12/2013 3,325.84 5,657.42
01/01/2014 3,492.13 5,940.29
02/01/2014 3,666.74 6,237.31
03/01/2014 3,850.07 6,549.17
04/01/2014 4,042.58 6,876.63
05/01/2014 4,244.71 7,220.46
06/01/2014 4,456.94 7,581.49
07/01/2014 4,679.79 7,960.56
08/01/2014 4,913.78 8,358.59
09/01/2014 5,159.47 8,776.52
10/01/2014 5,417.44 9,215.35
11/01/2014 5,688.31 9,676.11
12/01/2014 5,972.73 10,159.92
13/01/2014 6,271.36 10,667.91
14/01/2014 6,584.93 11,201.31
15/01/2014 6,914.18 11,761.38
16/01/2014 7,259.89 12,349.44
17/01/2014 7,622.88 12,966.92
18/01/2014 8,004.02 13,615.26
19/01/2014 8,404.23 14,296.03
20/01/2014 8,824.44 15,010.83
21/01/2014 9,265.66 15,761.37
22/01/2014 9,728.94 16,549.44
23/01/2014 10,215.39 17,376.91
24/01/2014 10,726.16 18,245.75
25/01/2014 11,262.47 19,158.04
26/01/2014 11,825.59 20,115.94
27/01/2014 12,416.87 21,121.74
28/01/2014 13,037.71 22,177.83
29/01/2014 13,689.60 23,286.72
30/01/2014 14,374.08 24,451.05
31/01/2014 15,092.78 25,673.61
01/02/2014 15,847.42 26,957.29
02/02/2014 16,639.79 28,305.15
03/02/2014 17,471.78 29,720.41
04/02/2014 18,345.37 31,206.43
05/02/2014 19,262.64 32,766.75
06/02/2014 20,225.77 34,405.09
07/02/2014 21,237.06 36,125.34
08/02/2014 22,298.91 37,931.61
09/02/2014 23,413.86 39,828.19
10/02/2014 24,584.55 41,819.60
11/02/2014 25,813.78 43,910.58
12/02/2014 27,104.47 46,106.11
13/02/2014 28,459.69 48,411.42
14/02/2014 29,882.68 50,831.99
15/02/2014 31,376.81 53,373.59
16/02/2014 32,945.65 56,042.26
17/02/2014 34,592.93 58,844.38
18/02/2014 36,322.58 61,786.60
19/02/2014 38,138.71 64,875.93
20/02/2014 40,045.64 68,119.72
21/02/2014 42,047.93 71,525.71
22/02/2014 44,150.32 75,101.99
23/02/2014 46,357.84 78,857.09
24/02/2014 48,675.73 82,799.95
25/02/2014 51,109.52 86,939.95
26/02/2014 53,664.99 91,286.94
27/02/2014 56,348.24 95,851.29
28/02/2014 59,165.66 100,643.86
01/03/2014 62,123.94 105,676.05

5000% sounds to me unlikely – but who would ever have thought it would have got as far as it has already – and it is still far from what I would call mainstream.

Nov 29

You don’t have to be human to have a bitcoin wallet.

bit-terminator

Could an artificial intelligence use bitcoins against us?

One of the unique properties of bitcoins is that you don’t need to be a human to have a wallet. It is as simple as getting a small piece of software or using an online service to receive your bitcoins.

In effect this means your pet dog could have it’s own bitcoin wallet – although the dog intelligent enough to use one has yet to be born.

More realistically looking to the future, bitcoin opens up some interesting possibilities in the world of AI. As artificial intelligence in computers starts to mature we will probably find that more and more AIs are trading bitcoins with each other and no humans involved. Robots or self aware computer programs could own bitcoins and use them to pay for goods and services that they wanted for themselves. We could even find that as they advanced further humans actually became minority stakeholders in bitcoins.

This is a worrying situation as then lets imagine a situation where these Artificial Intelligences worked co-operatively to bring about a 51% attack and effectively destroy bitcoins or held human kind to ransom. Without traditional currencies we humans would find ourselves left very vulnerable by relying to heavily one one single currency and the more and more we grow to rely on the digital world, the harder mankind will find it to press the off switch should something go wrong. The solution would probably have to involve sending a cyborg back in time to kill the father of Satoshi Nakamoto.

Does anyone else have any other thoughts on a future bitcoin apocalypse?

Nov 28

A beginners guide to bitcoins

What is a bitcoin?

Essentially a bitcoin is a digitally stored unit of value that can be transferred between users of the bitcoin network. When one user transfers a unit to another unit a digitally encrypted message is transmitted across the network of computers and if enough of these machines agree that it is a unique transaction it is confirmed.

Where do bitcoins come from?

Bitcoins are generated through a process called “mining”. Mining involves checking for a solution to a digital puzzle. Each time a batch of bitcoins is mined the next solution is much harder to find than the last thus ensuring it would not be possible to make lots of them in one go and destroying their value.

Who invented bitcoins?

Nobody actually knows who invented the bitcoin – although they (this could be a person or people) go by the pseudonym Satoshi Nakamoto. There recently has been speculation that the crypto-currency may have been invented by the recently arrested creator of the silk road web although this does not appear to be true.

How much is a bitcoin worth?
A bitcoin is worth what someone is willing to pay for it. At the time of writing this article (28th November 2013) people were willing to pay the follow prices for one:

1 BTC Bitcoin = ¥ 7,100.00 Chinese yuan
1 BTC Bitcoin = ¥ 110,295.37 Japanese Yen
1 BTC Bitcoin = $ 1,497.21 Singapore Dollar
1 BTC Bitcoin = $ 8,422.00 Hong Kong Dollar
1 BTC Bitcoin = 1 BTC Bitcoin
1 BTC Bitcoin = $ 1,180.00 Canadian Dollar
1 BTC Bitcoin = $ 1,205.84 Australian Dollar
1 BTC Bitcoin = $ 1,338.44 New Zealand Dollar
1 BTC Bitcoin = £ 670.01 Great British Pound
1 BTC Bitcoin = kr 5,917.52 Danish Krone
1 BTC Bitcoin = kr 7,200.00 Swedish Krona
1 BTC Bitcoin = R$ ∞ Brazil Real
1 BTC Bitcoin = 1,000.00 CHF Swiss Franc
1 BTC Bitcoin = € 802.00 Euro
1 BTC Bitcoin = 37,400.00 RUB Russian Ruble
1 BTC Bitcoin = zł 3,359.74 Polish Zloty
1 BTC Bitcoin = ฿ 35,254.09 Thai baht
1 BTC Bitcoin = $ 997.00 U.S. dollar
1 BTC Bitcoin = 1,000 mBTC MilliBit (mBTC)

How do I get a bitcoin?

You can get a bitcoin either by mining one for yourself, mining one as part of a group of miners and taking a share of the rewards or you can convince someone to transfer you one – generally either by paying for it, gambling for it, selling something to someone or working for it. Some people give them away for free. Please see the Faucet section of our website for more information on free coins.

How many bitcoins are there?

There are currently around 11,000,000 bitcoins in circulation. The total amount of bitcoins that there will ever be is around 21,000,000 this is a limitation built into the currency to prevent a glut of coins coming into the market and destroying the value.

What is so good about bitcoins?

Bitcoins represent a way of transferring capital around the world cheaply, quickly and currently anonymously. However, the recent revelations about national governments (Especially the USA) snooping on internet traffic and the fact that the blockchain (a shared database of all transactions) is available for all to look at may compromise the anonymity of the service.

I have heard that bitcoins are bad as people use them to do illegal things with. Is this true?

That is subjective. Until the advent of bitcoins the United States dollar was the currency of choice for illegal transactions. Dollars aren’t bad are they? Gold can also be used anonymously – but is just much harder to move around than bitcoins.

What can I do with a bitcoin?

You can transfer it to someone else or keep it. More and more businesses are starting to accept bitcoins as payment for goods and services. Richard Branson recently announced that he would accept bitcoins for a trip on his new Virgin Galactic service to the edge of space.

Why can’t a bitcoin be forged?

The fact so many different individuals are part of the network and own bitcoins makes it very difficult to ‘double spend’ coins. There is such a thing as a 51% attack whereby one individual manages to get control of 51% of the network. In the event they did this they could do as they liked with bitcoins. As more people get involved this becomes increasingly more difficult.

What is going to happen to bitcoins?

The truth is nobody knows. They could replace money in the majority of transactions in which case they will become incredibly valuable or there could be an as yet unnoticed flaw in the system that renders them completely worthless. Both arguments are at this stage equally valid. However, no matter what happens I believe that bitcoins have already changed the world.

For a more detailed (and more technical) explanation of bitcoins – please click here.