In the last month, Bitcoin — the biggest and best-known cryptocurrency— rose in value by 480 percent. The sudden spike spurred more people to invest in the currency, while others dedicate computers to the task of mining bitcoins. Siberian entrepreneurs Ilya Frolov and Dmitry Tolmachyov are engaged in the latter – and they’ve found that they’re able to heat a 20-square-meter with two machines while pocketing $430 per month.
Bitcoin transactions require a lot of computer processing power, which in turn produces a substantial amount of heat. Most “miners” just release that heat into the atmosphere — but not Frolov and Tolmachyov. The Russian entrepreneurs built a cottage in the Siberian town of Irkutsk that is heated by two Bitcoin mining machines. Each month, the men make about $430. And, they pay $0 to heat the 20-square-meter abode. In the video above, Quartz details how this is possible.
Related: Power-hungry Bitcoin could consume as much energy as Denmark by 2020
Because Bitcoin is relatively new, it is still considered a highly volatile investment. However it has provided gains exceeding those of any other currency in every year but one since 2010, according to The Independent.
The process of “mining” Bitcoin determines which transactions are valid, and which should be added to the blockchain — an ever-expanding ledger that holds the transaction history of all Bitcoins in circulation. The blockchain lives in the thousands of machines on the bitcoin network. Mining also ensures the system cannot be gamed, thus, making the cryptocurrency more secure than the US dollar.
Every ten minutes, mining computers collect a few hundred pending Bitcoin transactions and turn them into a mathematical puzzle. The first miner to find the solution declares it to others on the network. The other miners then check whether the sender of the funds has the right to spend the money. If enough approval is granted, the block is cryptographically added to the ledger and the miners move onto the next set of transactions.
A miner who finds the solution gets 12.5 Bitcoins as a reward, but only after another 99 blocks have been added to the ledger. This gives all miners an incentive to participate in the system and validate transactions. It also provides protection; to double-spend a Bitcoin, digital bank robbers would have to rewrite the blockchain — that would require more than half of the network’s puzzle-solving capacity!
Via Quartz, The Economist, The Independent
Data furnaces are coming.... Our first rough prototype of a crypto-mining radiator https://vimeo.com/237945356. Be interested to know if anyone else was building similar kit.