Bitcoin Mining: Transition to Cloud

Bitcoin Mining: Transition to Cloud

Hari Krishnan Ramachandran (Department of Computer Science and Engineering, Sri Ramaswamy Memorial University, Tamil Nadu, India), Sai Saketh (Department of Computer Science and Engineering, Sri Ramaswamy Memorial University, Tamil Nadu, India) and Marichetty Venkata Teja Vaibhav (Sri Ramaswamy Memorial University, Tamil Nadu, India)
Copyright: © 2015 |Pages: 32
DOI: 10.4018/IJCAC.2015100104
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Abstract

Cryptocurrency, a form of digital currency that has an open and decentralized system and uses cryptography to enhance security and control the creation of new units, is touted to be the next step from conventional monetary transactions. Many Cryptocurrencies exist today, with Bitcoin being the most prominent of them. Cryptocurrencies are generated by mining, as a fee for validating any transaction. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machine such as ASICs, running complex hashing algorithms like SHA-256, thereby leading to faster generation of Cryptocurrencies. With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest huge sums of money on employing and maintaining multiple high performance ASICs. This paper throws light on the nuances of Cryptocurrency mining process, the issues of traditional mining machines and the implication of incorporating cloud technology to current mining infrastructure.
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2. Mining Algorithms

SHA-256 and Scrypt are the two most common algorithm systems used by cryptocurrency miners in order to authenticate blocks of transaction data. Before jumping into that, however, let's talk hash in a little more detail.

What is a hash? The term refers to complex mathematical computations that are required in order for successful mining to take place, and you'll often see “hash rates” listed along with hardware created for digital currency mining. The higher the hash rate required for successful mining, the longer and more difficult the process will be for miners; this is expressed as the “hash difficulty” of a given type of currency.

Figure 1.

Example of hashing

Some common hash rate abbreviations are:

  • KH/s: Kilohashes per second, or one thousand hash computations per second;

  • MH/s: Megahashes per second, or one million hash computations per second;

  • GH/s: Gigahashes per second, or one billion hash computations per second;

  • TH/s: Terrahashes per second, or one trillion hash computations per second;

  • PH/s: Petahashes per second, or one quadrillion hash computations per second.

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