Bitcoin mining program

Technical Background more »

During mining, your computer runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header . For each new hash, the mining software will use a different number as the random element of the block header, this number is called the nonce . Depending on the nonce and what else is in the block the hashing function will yield a hash which looks like this:

You can look at this hash as a really long number. (It's a hexadecimal number, meaning the letters A-F are the digits 10-15.) Now to make mining difficult, there is what's called a difficulty target . To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is 1000000000000000000000000000000000000000000000000000000000000000, any number that starts with a zero would be below the target, e.g.:

If we lower the target to 0100000000000000000000000000000000000000000000000000000000000000, we now need two zeros in the beginning to be under it:

Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty . The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi had to do generating the first block. Though be fair though, back then mining was a lot slower and less optimized.

The difficulty changes every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That's why, when the network power rises, the difficulty rises as well.

Bitcoin Mining Hardware

CPU's: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. This method is no longer viable now that the network difficulty level is so high. You might mine for years and years without earning a single coin.

GPU's: Soon it was discovered that high end graphics cards were much more efficient at bitcoin mining and the landscape changed. CPU bitcoin mining gave way to the GPU (Graphical Processing Unit). The massively parallel nature of some GPUs allowed for a 50x to 100x increase in bitcoin mining power while using far less power per unit of work. While any modern GPU can be used to mine, the AMD line of GPU architecture turned out to be far superior to the nVidia architecture for mining bitcoins and the ATI Radeon HD 5870 turned out to be the most cost effective choice at the time.

FPGA's: As with the CPU to GPU transition, the bitcoin mining world progressed up the technology food chain to the Field Programmable Gate Array. With the successful launch of the Butterfly Labs FPGA ‘Single', the bitcoin mining hardware landscape gave way to specially manufactured hardware dedicated to mining bitcoins. While the FPGAs didn't enjoy a 50x - 100x increase in mining speed as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400w of power, whereas a typical FPGA mining device would provide a hashrate of 826 MH/s at 80w of power. That 5x improvement allowed the first large bitcoin mining farms to be constructed at an operational profit. The bitcoin mining industry was born.

ASIC's: The bitcoin mining world is now solidly in the Application Specific Integrated Circuit (ASIC) era. An ASIC is a chip designed specifically to do one thing and one thing only. Unlike FPGA's, an ASIC cannot be repurposed to perform other tasks. An ASIC designed to mine bitcoins can only mine bitcoins and will only ever mine bitcoins. The inflexibility of an ASIC is offset by the fact that it offers a 100x increase in hashing power while reducing power consumption compared to all the previous technologies. For example, a good bitcoin miner like the Monarch from Butterfly Labs provides 600 GH/s (1 Gigahash is 1000 Megahash. 1 GH/s = 1000 MH/s) while consuming 350w of power. Compared to the GPU era, this is an increase in hashrate and power savings of nearly 300x. (Calculate the earnings of any bitcoin mining hardware device using this bitcoin mining calculator ).

Unlike all the previous generations of hardware preceding ASIC, ASIC is the "end of the line" when it comes to disruptive technology. CPUs were replaced by GPUs which were in turn replaced by FPGAs which were replaced by ASICs. There is nothing to replace ASICs now or even in the immediate future. There will be stepwise refinement of the ASIC products and increases in efficiency, but nothing will offer the 50x - 100x increase in hashing power or 7x reduction in power usage that moves from previous technologies offered. This makes power consumption on an ASIC device the single most important factor of any ASIC product, as the expected useful lifetime of an ASIC mining device is longer than the entire history of bitcoin mining. It is conceivable that an ASIC device purchased today would still be mining in two years if the device is power efficient enough and the cost of electricity does not exceed it's output. Mining profitability is also dictated by the exchange rate, but under all circumstances the more power effecient the mining device, the more profitable it is.

Software

There are two basic ways to mine: On your own or as part of a pool. Almost all miners choose to mine on a pool because it takes the luck out of the process. Before you join a pool, make sure you have a bitcoin wallet so you have a place to store your bitcoins. Next you need to join a mining pool like Eclipse. Eligius or BTC Guild. With pool mining, the profit from any block a member generates is divided up among the members of the pool. This gives the pool members a more frequent, steady payout (this is called reducing your variance), but your payout(s) will be less unless you use a zero fee pool like Eclipse. Solo mining will give you large, infrequent payouts and pooled mining will give you small, frequent payouts, but both add up to the same amount if you're using a zero fee pool.

Once you have your client set up or you have registered with a pool, the next step is to set up the actual mining software. The most popular GPU/FPGA/ASIC miner at the moment is BFGminer or CGminer. For a full GUI experience, try EasyMiner .

If you want a quick taste of mining without installing any software, try Bitcoin Plus. a browser-based CPU Bitcoin miner. As a CPU miner it's not cost-efficient for serious mining, but it does illustrate the principle of pooled mining very well.

Thanks to:

Blitzboom and the guys from #bitcoin-dev for their help with writing the guide!

Quick updates

02.02.2014

Datacenter connectivity issues have caused short drop in the hashrate. The problem has been resolved and all stratum servers are now reachable. This all happened when 900 Th/s was within a reach. We will get there again with your support and participation in mining ;-)

17.01.2014

We were having an extremely lucky yesterday's mining session. Unfortunately, around 1.30 AM UTC, we were experiencing stratum server issues that eventually spread across all our stratum servers. The problem has been resolved now and mining continues.

13.01.2014

The pool database backend has been successfully migrated to a new hardware. The website is now fully operational. The whole migration process has been accomplished without interrupting the actual mining.

13.01.2014

We are currently migrating pool database to a new machine. Mining will continue without interruption, only website will be down for 1-2 hours.

18.12.2013

Some recent payouts didn't go thru bitcoin network because of unsatisfied transaction fees. We're finding a soluton and all payouts will be processed soon

16.10.2013

In recent days we experienced some successful thefts of user's funds using compromised email accounts. We strongly encourage all users to change email passwords. There's no reason to think that pool security itself has been compromised.

08.07.2013

Getwork protocol support ended. Please be sure your miners support Stratum protocol. You can still use your old getwork miners with Stratum proxy installed on your mining rig.

21.05.2013

Bug in bitcoind caused many invalid blocks generated in recent hours. Thanks to cooperation with bitcoin developers, a bugfix has been deployed. Pool is now back in normal operation.

26.04.2013

Because the user database has been compromised in recent hack, please change password to your pool account!

25.04.2013

Pool is recovering to normal operation from previous attack. delayed payouts will be processed in the afternoon (UTC).

18.04.2013

Pool is recovering from DDoS attack.

14.04.2013

As announced in Getwork deprecation plan. the hashrate on Stratum is far above 90%, so workers which are still using the deprecated Getwork protocol are now charged by 10% fee. Please update your software and start using modern Stratum miners to reduce your fees back to 2%!

12.03.2013

Bitcoin network recently experienced global problems which caused some pool blocks to be invalid. Everything seems to be fixed now.

10.03.2013

Default mining URL for Stratum is stratum.bitcoin.cz:3333 . If you're still using api.bitcoin.cz, please fix your URL to prevent fallback to deprecated Getwork protocol.

08.03.2013

Stratum proxy version 1.5.2 has been released. This is bugfix release which add compatibility with some old miners (phoenix, Diablo).

03.03.2013

Stratum proxy version 1.5.0 has been released. All proxy users are encouraged to update .

13.02.2013

ASIC mining become a reality. Jeff Garzik (bitcoin core developer) is testing first shipped unit of Avalon ASIC miner on our pool.

30.01.2013

Native IPv6 address is now available. You can use ipv6.stratum.bitcoin.cz:3333 in your miner if your miners have IPv6 support! Please note that IPv6 works only for Stratum miners.

08.12.2012

If you're using old miners from early 2011 or you're mining on URL "mining.bitcoin.cz:8332", please update your miners and use "api.bitcoin.cz:8332" in your configuration instead. Mining on URL "mining.bitcoin.cz" is not working anymore.

27.11.2012

Only one day remains to halving block reward from 50 BTC to 25 BTC. Thanks to this change in Bitcoin world, mining income will be drastically reduced. As a countermeasure, pool is now paying block fees to miners. Everything you need to collect block fees is to use miner with Stratum support .

24.11.2012

Pool is now giving transaction fees to Stratum miners! Use miner with Stratum support (latest version of GUIminer, cgminer, bfgminer, poclbm) or use your favourite miner with Stratum proxy to improve your mining income!

19.11.2012

Guiminer with Stratum support has been released. Upgrade is highly recommended.

12.10.2012

All users are encouraged to install or update Stratum proxy to current stable version 1.1.1. Instructions are here .

12.10.2012

New version of cgminer has been released. Please update cgminer to version 2.8.3 . which fixes serious bugs introduced in previous versions.

10.10.2012

In effect from 01.11.2012, pool increases the lower limit for payouts ("send threshold") to 0.05 BTC (around $0.6) as a protection against high transaction fees for tiny payouts. If you have a balance of less than 0.05 BTC and want to withdraw them, please do so before November 1.

20.09.2012

New version of poclbm miner has been released. All poclbm users are encouraged to update their miner, latest version includes major optimization.

11.09.2012

I'm seeking for beta testers of new mining protocol called Stratum mining. If you want to join testing, please download the proxy and point your miners to it. Thank you!

08.07.2012

Do you have some bitcoins from the mining and do you want to sell them for cheap? Add your offer to localbitcoins.com and find a buyer in your neighborhood!

11.06.2012

Follow pool's page for recent updates and news!

05.02.2012

poclbm/GUI miner is affected by serious bug. If your miner is crashing on 'unexpected error' message, please follow miner forums for the newest versions.

26.01.2012

Pool is now supporting BIP 16 protocol extension, as described here. It is just internal change on the Bitcoin network, miners don't need to update anything.

08.11.2011

Implemented prioritization of long polling. Fast miners should expect lower stale ratio.

10.10.2011

Merged mining for Namecoins added. Please fill NMC address on your profile to start collecting Namecoins! Accounting isn't finished yet, but will come very soon.

03.10.2011

Bitcoin.cz is official sponsor of European Bitcoin conference 2011. See you on 25.-27. November in Prague!

26.03.2011

Second server added

Total hashrate at 60Ghash/s

19.01.2011

We're over 20 Ghash/s

20.12.2010

Bitcoin Mining?

Getting

started

Bitcoin

Mining Pools

Bitcoin

Mining Software

Bitcoin

Mining Hardware

While the actual process of mining is handled by the mining hardware itself, special software is needed to connect your miners to the blockchain and your mining pool as well, if you are part of a mining pool. The software delivers the work to the miners and receives the completed work from the miners and relays that information back to the blockchain and your mining pool. The software can run on almost any operating system, such as OSX, Windows, Linux, and has even been ported to work on a Raspberry Pi with some modifications for drivers depending on your mining setup.

Not only does the software relay the input and output of your miners to the blockchain, but it also monitors them and displays general statistics such as the temperature, hashrate, fan speed, and average speed of the miner.

There are a few different types of mining software out there and each have their own advantages and disadvantages, so be sure to read up on the various mining software out there.

A few examples of mining software:

EASYMINER: A GUI based miner for Windows, Linux and Android. EasyMiner acts as a convenient wrapper for the built in CG & BFGminer softwares. It auto configures your miners and provides performance graphs to for easy visualization of your mining activity.

BFGMINER: A modular ASIC, FPGA, GPU and CPU miner written in C, cross platform for Linux, Mac, and Windows including support for OpenWrt-capable routers.

CGMINER: This is a multi-threaded multi-pool GPU, FPGA and ASIC miner with ATI GPU monitoring, (over)clocking and fanspeed support for bitcoin and derivative coins.

If you want to get a better idea of mining without installing any software, try Bitcoin Plus, a browser-based CPU Bitcoin miner. As a CPU miner it's not cost-efficient for serious mining, but it helps illustrate the process of pool mining.

Beginners Guide to Mining Bitcoins

One of the biggest problems I ran into when I was looking to start mining Bitcoin for investment and profit was most of the sites were written for the advanced user. I am not a professional coder, I have no experience with Ubuntu, Linux and minimal experience with Mac. So, this is for the individual or group that wants to get started the easy way.

First thing you need to do is get a “Bitcoin Wallet”. Because Bitcoin is an internet based currency, you need a place to keep your Bitcoins. Got to http://www.bitcoin.org and download the Bitcoin client for your Operating System. Install it the client will begin to download the blockchain. Downloading the blockchain can take a long time and will be over 6GB of data. If you have data caps, I would recommend ordering a copy of the blockchain on DVD to keep from going over as it is growing exponentially. Click to order the bitcoin blockchain by mail. Once the client is up to date, click “New” to get your wallet address. It will be a long sequence of letters and numbers. One of most important things you can do is make sure you have a copy of the wallet.dat file on a thumb drive and print a copy out and keep it in a safe location. You can view a tutorial on how to create a secure wallet by clicking the link on the top of the page. The reason is that if you computer crashes and you do not have a copy of your wallet.dat file, you will lose all of your Bitcoins. They won’t go to someone else, they will disappear forever. It is like burning cash.

Now that you have a wallet and the client, you are probably roaring to go, but if you actually want to make Bitcoin (money), you probably need to join a pool. A pool is a group that combines their computing power to make more Bitcoins. The reason you shouldn’t go it alone is that Bitcoins are awarded in blocks, usually 50 at a time, and unless you get extremely lucky, you will not be getting any of those coins. In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn Bitcoins that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of Bitcoins and will be more likely to receive a good return on your investment.

The pool that I’m involved in is called Slush’s Pool so I will be giving instructions on how to join there but feel free to look at other options. Follow the link to go to their site and click the “Sign up here” link at the top of their site and follow their step by step instructions. After you have your account set up, you will need to add a “Worker”. Basically, for every miner that you have running, you will need to have a worker ID so the pool can keep track of your contributions.

If you are mining with an ASIC, please go to our Mining with ASICs page. The following will only pertain to GPU miners.

Most of the mining programs out there are pretty complicated to setup and will frustrate your average user. Recently a great program has come out to get the most basic of users started. The program is called GUIMiner. Click the link and download the program (Be careful, some of the ads are set up to look like the file download). Install and run the program and add in your information from Slush’s Pool. Remember that the user name is actually the worker name. The worker name will be your user name, dot, worker ID (username.worker ID) and the password from that worker ID.

Mac users should look into using Astroid

Now that you are set up, you can start mining. If you feel like you want to make more Bitcoins, you might want to invest in mining hardware.

To see how much your current hardware will earn mining Bitcoins, head over to the Bitcoin Profitability Calculator .

If you found this information helpful, please donate to 1G1ehppEgjiFTUSHFz2xs9KLSQuWLPYF2o

Bitcoin mining profitability

Bitcoin mining profitability calculator

Nothing guaranteed, of course this is only a rough estimate!  You can also calculate rented mining by setting “Power consumption” to 0 and “Cost of mining hardware” to the rent per time frame. Default values are for a 50 GH/s Bitcoin Miner .

Estimate Strategy

Extrapolating bitcoin difficulty or price is pure voodoo. It is much easier to predict the relationship of the two parameters in form of the Mining Factor. The Mining Factor 100 is the value in USD of the bitcoins you can generate if you let a 100MHash/s miner run for 24 hours. If the Mining Factor 100 rises above $2 or so everybody buys mining equipment and thus increases difficulty. If it falls people will stop mining eventually. The estimate starts with the current Mining Factor and decreases it exponentially such that the decrease accounts for the factor decline per year. Please note that a profit/loss by holding the coins is not accounted for in this estimate.

Things to consider that might eat into your profit:

The values above are only a snapshot. The network and markets are moving quickly. Check out these diagrams to get a feeling for it.Looks like if your mining operation is not profitable now, it probably will not be in the future.

With rising bitcoin exchange rates it might be more profitable to buy bitcoins than to mine. There are spreadsheets available in this thread or this one (with some FPGA data) for a more custom calculation.Bitcoin exchanges: MtGox. Tradehill. CryptoXchange .

The calculation is based on average block generation time. The closer the average generation time is to the time frame the more the resulting revenue depends on luck.

You will have to pay mining pool fees from close to nothing up to 3% depending on the pool. Unless you want to do pool hopping you should go to a pool with hopping protection. I recommend Arsbitcoin and EclipseMC (with namecoin merged mining). P2Pool is a new completely decentralized alternative.

You will get somewhere from 1% to 3% of “stale shares”. Thread .

When the block count will hit

200000 some time around December 2012 the generation reward will go down to 25BTC. This might partly be compensated by falling difficulty, raising prices, higher transfer fees, etc.

A mining computer generates a lot of heat as a byproduct. This can impact your heating/airconditioning costs depending on outside temperatures. Other byproducts could be noise and an angry wife.

Do you have lots of experience with and like working with computers during lonesome nights? You have to spend quite some time to set up the system (easily several days!) and watch it.

You will not get a 100% uptime.

You will probably not be able to reach the highest values in the Mining Hardware Comparison. Some bragging / measuring error and extensive overclocking of the cards is involved here.

Scaling effects: three cards in one rig do worse than a single card because it gets harder to get out the heat. Results in the list above do not reflect the number of cards.

A disruptive technology like ASIC chips could show up and make GPU mining less profitable.

Politics and legal issues might affect the bitcoin market.

Possible additional benefits:

For suggestions, infos or links on the topic to add, please contact me directly (info [at] bitcoinx.com) or in this thread on the bitcoin forum.

Quick updates

02.02.2014

Datacenter connectivity issues have caused short drop in the hashrate. The problem has been resolved and all stratum servers are now reachable. This all happened when 900 Th/s was within a reach. We will get there again with your support and participation in mining ;-)

17.01.2014

We were having an extremely lucky yesterday's mining session. Unfortunately, around 1.30 AM UTC, we were experiencing stratum server issues that eventually spread across all our stratum servers. The problem has been resolved now and mining continues.

13.01.2014

The pool database backend has been successfully migrated to a new hardware. The website is now fully operational. The whole migration process has been accomplished without interrupting the actual mining.

13.01.2014

We are currently migrating pool database to a new machine. Mining will continue without interruption, only website will be down for 1-2 hours.

18.12.2013

Some recent payouts didn't go thru bitcoin network because of unsatisfied transaction fees. We're finding a soluton and all payouts will be processed soon

16.10.2013

In recent days we experienced some successful thefts of user's funds using compromised email accounts. We strongly encourage all users to change email passwords. There's no reason to think that pool security itself has been compromised.

08.07.2013

Getwork protocol support ended. Please be sure your miners support Stratum protocol. You can still use your old getwork miners with Stratum proxy installed on your mining rig.

21.05.2013

Bug in bitcoind caused many invalid blocks generated in recent hours. Thanks to cooperation with bitcoin developers, a bugfix has been deployed. Pool is now back in normal operation.

26.04.2013

Because the user database has been compromised in recent hack, please change password to your pool account!

25.04.2013

Pool is recovering to normal operation from previous attack. delayed payouts will be processed in the afternoon (UTC).

18.04.2013

Pool is recovering from DDoS attack.

14.04.2013

As announced in Getwork deprecation plan. the hashrate on Stratum is far above 90%, so workers which are still using the deprecated Getwork protocol are now charged by 10% fee. Please update your software and start using modern Stratum miners to reduce your fees back to 2%!

12.03.2013

Bitcoin network recently experienced global problems which caused some pool blocks to be invalid. Everything seems to be fixed now.

10.03.2013

Default mining URL for Stratum is stratum.bitcoin.cz:3333 . If you're still using api.bitcoin.cz, please fix your URL to prevent fallback to deprecated Getwork protocol.

08.03.2013

Stratum proxy version 1.5.2 has been released. This is bugfix release which add compatibility with some old miners (phoenix, Diablo).

03.03.2013

Stratum proxy version 1.5.0 has been released. All proxy users are encouraged to update .

13.02.2013

ASIC mining become a reality. Jeff Garzik (bitcoin core developer) is testing first shipped unit of Avalon ASIC miner on our pool.

30.01.2013

Native IPv6 address is now available. You can use ipv6.stratum.bitcoin.cz:3333 in your miner if your miners have IPv6 support! Please note that IPv6 works only for Stratum miners.

08.12.2012

If you're using old miners from early 2011 or you're mining on URL "mining.bitcoin.cz:8332", please update your miners and use "api.bitcoin.cz:8332" in your configuration instead. Mining on URL "mining.bitcoin.cz" is not working anymore.

27.11.2012

Only one day remains to halving block reward from 50 BTC to 25 BTC. Thanks to this change in Bitcoin world, mining income will be drastically reduced. As a countermeasure, pool is now paying block fees to miners. Everything you need to collect block fees is to use miner with Stratum support .

24.11.2012

Mining for Bitcoins is profitable? Are you sure?

Pool is now giving transaction fees to Stratum miners! Use miner with Stratum support (latest version of GUIminer, cgminer, bfgminer, poclbm) or use your favourite miner with Stratum proxy to improve your mining income!

19.11.2012

Guiminer with Stratum support has been released. Upgrade is highly recommended.

12.10.2012

All users are encouraged to install or update Stratum proxy to current stable version 1.1.1. Instructions are here .

12.10.2012

New version of cgminer has been released. Please update cgminer to version 2.8.3 . which fixes serious bugs introduced in previous versions.

10.10.2012

In effect from 01.11.2012, pool increases the lower limit for payouts ("send threshold") to 0.05 BTC (around $0.6) as a protection against high transaction fees for tiny payouts. If you have a balance of less than 0.05 BTC and want to withdraw them, please do so before November 1.

20.09.2012

New version of poclbm miner has been released. All poclbm users are encouraged to update their miner, latest version includes major optimization.

11.09.2012

I'm seeking for beta testers of new mining protocol called Stratum mining. If you want to join testing, please download the proxy and point your miners to it. Thank you!

08.07.2012

Do you have some bitcoins from the mining and do you want to sell them for cheap? Add your offer to localbitcoins.com and find a buyer in your neighborhood!

11.06.2012

Follow pool's page for recent updates and news!

05.02.2012

poclbm/GUI miner is affected by serious bug. If your miner is crashing on 'unexpected error' message, please follow miner forums for the newest versions.

26.01.2012

Pool is now supporting BIP 16 protocol extension, as described here. It is just internal change on the Bitcoin network, miners don't need to update anything.

08.11.2011

Implemented prioritization of long polling. Fast miners should expect lower stale ratio.

10.10.2011

Merged mining for Namecoins added. Please fill NMC address on your profile to start collecting Namecoins! Accounting isn't finished yet, but will come very soon.

03.10.2011

Bitcoin.cz is official sponsor of European Bitcoin conference 2011. See you on 25.-27. November in Prague!

26.03.2011

Second server added

Total hashrate at 60Ghash/s

19.01.2011

We're over 20 Ghash/s

20.12.2010

Beginners Guide to Mining Bitcoins

One of the biggest problems I ran into when I was looking to start mining Bitcoin for investment and profit was most of the sites were written for the advanced user. I am not a professional coder, I have no experience with Ubuntu, Linux and minimal experience with Mac. So, this is for the individual or group that wants to get started the easy way.

First thing you need to do is get a “Bitcoin Wallet”. Because Bitcoin is an internet based currency, you need a place to keep your Bitcoins. Got to http://www.bitcoin.org and download the Bitcoin client for your Operating System. Install it the client will begin to download the blockchain. Downloading the blockchain can take a long time and will be over 6GB of data. If you have data caps, I would recommend ordering a copy of the blockchain on DVD to keep from going over as it is growing exponentially. Click to order the bitcoin blockchain by mail. Once the client is up to date, click “New” to get your wallet address. It will be a long sequence of letters and numbers. One of most important things you can do is make sure you have a copy of the wallet.dat file on a thumb drive and print a copy out and keep it in a safe location. You can view a tutorial on how to create a secure wallet by clicking the link on the top of the page. The reason is that if you computer crashes and you do not have a copy of your wallet.dat file, you will lose all of your Bitcoins. They won’t go to someone else, they will disappear forever. It is like burning cash.

Now that you have a wallet and the client, you are probably roaring to go, but if you actually want to make Bitcoin (money), you probably need to join a pool. A pool is a group that combines their computing power to make more Bitcoins. The reason you shouldn’t go it alone is that Bitcoins are awarded in blocks, usually 50 at a time, and unless you get extremely lucky, you will not be getting any of those coins. In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn Bitcoins that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of Bitcoins and will be more likely to receive a good return on your investment.

The pool that I’m involved in is called Slush’s Pool so I will be giving instructions on how to join there but feel free to look at other options. Follow the link to go to their site and click the “Sign up here” link at the top of their site and follow their step by step instructions. After you have your account set up, you will need to add a “Worker”. Basically, for every miner that you have running, you will need to have a worker ID so the pool can keep track of your contributions.

If you are mining with an ASIC, please go to our Mining with ASICs page. The following will only pertain to GPU miners.

Most of the mining programs out there are pretty complicated to setup and will frustrate your average user. Recently a great program has come out to get the most basic of users started. The program is called GUIMiner. Click the link and download the program (Be careful, some of the ads are set up to look like the file download). Install and run the program and add in your information from Slush’s Pool. Remember that the user name is actually the worker name. The worker name will be your user name, dot, worker ID (username.worker ID) and the password from that worker ID.

Mac users should look into using Astroid

Now that you are set up, you can start mining. If you feel like you want to make more Bitcoins, you might want to invest in mining hardware.

To see how much your current hardware will earn mining Bitcoins, head over to the Bitcoin Profitability Calculator .

If you found this information helpful, please donate to 1G1ehppEgjiFTUSHFz2xs9KLSQuWLPYF2o

Bitcoin mining pools

Bitcoin Mining | Bitcoin Mining Rig & Pool - Video

Bitcoin Mining?

Getting

started

Bitcoin

Mining Pools

Bitcoin

Mining Software

Bitcoin

Mining pools are a way for miners to pool their resources together and share their hashing power while splitting the reward equally according to the amount of shares they contributed to solving a block. A "share" is awarded to members of the mining pool who present a valid proof of work that their miner solved. Mining in pools began when the difficulty for mining increased to the point where it could take years for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks quicker and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.

Mining Pools

There are many good mining pools to choose from. Although it's tempting to pick the most popular one, it's better for the health of the network to mine with smaller pools so as to avoid potentially harmful concentration of hashing power. To see the relative size of any given pool, check blockchain.info's pool pie chart .

For a fully decentralized pool, we recommend p2pool .

A comparison list of all mining pools can be found here .

Pool Payment Methods

Calculating your share of the coins mined can be complex. In an ongoing effort to come up with the fairest method and prevent gaming of the system, many calculation schemes have been invented. The two most popular types are PPS and DGM. PPS, or 'pay per share' shifts the risk to the pool while they guarantee payment for every share you contribute. PPS payment schemes require a very large reserve of 10,000 BTC in order to ensure they have the means of enduring a streak of bad luck. For this reason, most pools no longer support it. One of the few remaining PPS pools is EclipseMC. DGM is a popular payment scheme because it offers a nice balance between short round and long round blocks. However, end users must wait for full round confirmations long after the blocks are processed.

PPS: The Pay-per-Share (PPS) approach offers an instant, guaranteed payout for each share that is solved by a miner. Miners are paid out from the pools existing balance and can withdraw their payout immediately. This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool's operator.

PROP: The Proportional approach offers a proportional distribution of the reward when a block is found amongst all workers, based off of the number of shares they have each found.

PPLNS: The Pay Per Last N Shares (PPLN) approach is similar to the proportional method, but instead of counting the number of shares in the round, it instead looks at the last N shares, no matter the boundaries of the round.

DGM: The Double Geometric Method (DGM) is a hybrid approach that enables the operator to absorb some of the risk. The operator receives a portion of payouts during short rounds and returns it during longer rounds to normalize payments.

SMPPS: The Shared Maximum Pay Per Share (SMPPS) uses a similar approach to PPS but never pays more than the pool has earned.

ESMPPS: The Equalized Shared Maximum Pay Per Share (ESMPPS) is similar to SMPPS, but distributes payments equally among all miners in the pool.

RSMPPS: The Recent Shared Maximum Pay Per Share (RSMPPS) is also similar to SMPPS, but the system prioritizes the most recent miners first.

CPPSRB: The Capped Pay Per Share with Recent Backpay uses a Maximum Pay Per Share (MPPS) reward system that will pay miners as much as possible using the income from finding blocks, but will never go bankrupt.

BPM: Bitcoin Pooled mining (BPM), also known as "slush's pool", uses a system where older shares from the beginning of a block round are given less weight than more recent shares. This reduces the ability to cheat the mining pool system by switching pools during a round.

POT: The Pay on Target (POT) approach is a high variance PPS that pays out in accordance with the difficulty of work returned to the pool by a miner, rather than the difficulty of work done by the pool itself.

SCORE: The SCORE based approach uses a system whereby a proportional reward is distributed and weighed by the time the work was submitted. This process makes later shares worth more than earlier shares and scored by time, thus rewards are calculated in proportion to the scores and not shares submitted.

ELIGIUS: Eligius was designed by Luke Jr. creator of BFGMiner, to incorporate the strengths of PPS and BPM pools, as miners submit proofs-of-work to earn shares and the pool pays out immediately. When the block rewards are distributed, they are divided equally among all shares since the last valid block and the shares contributed to stale blocks are cycled into the next block's shares. Rewards are only paid out if a miner earns at least .67108864 and if the amount owed is less than that it will be rolled over to the next block until the limit is achieved. However, if a miner does not submit a share for over a period of a week, then the pool will send any remaining balance, regardless of its size.

Triplemining: Triplemining brings together medium-sized pools with no fees and redistributes 1% of every block found, which allows your share to grow faster than any other pool approach. The administrators of these pools use some of the Bitcoins generated when a block is found to add to a jackpot that is triggered and paid out to the member of the pool who found the block. In this way, everyone in the pool has a better chance to make additional Bitcoins, regardless of their processing power.

Quick updates

02.02.2014

Datacenter connectivity issues have caused short drop in the hashrate. The problem has been resolved and all stratum servers are now reachable. This all happened when 900 Th/s was within a reach. We will get there again with your support and participation in mining ;-)

17.01.2014

We were having an extremely lucky yesterday's mining session. Unfortunately, around 1.30 AM UTC, we were experiencing stratum server issues that eventually spread across all our stratum servers. The problem has been resolved now and mining continues.

13.01.2014

The pool database backend has been successfully migrated to a new hardware. The website is now fully operational. The whole migration process has been accomplished without interrupting the actual mining.

13.01.2014

We are currently migrating pool database to a new machine. Mining will continue without interruption, only website will be down for 1-2 hours.

18.12.2013

Some recent payouts didn't go thru bitcoin network because of unsatisfied transaction fees. We're finding a soluton and all payouts will be processed soon

16.10.2013

In recent days we experienced some successful thefts of user's funds using compromised email accounts. We strongly encourage all users to change email passwords. There's no reason to think that pool security itself has been compromised.

08.07.2013

Getwork protocol support ended. Please be sure your miners support Stratum protocol. You can still use your old getwork miners with Stratum proxy installed on your mining rig.

21.05.2013

Bug in bitcoind caused many invalid blocks generated in recent hours. Thanks to cooperation with bitcoin developers, a bugfix has been deployed. Pool is now back in normal operation.

26.04.2013

Because the user database has been compromised in recent hack, please change password to your pool account!

25.04.2013

Pool is recovering to normal operation from previous attack. delayed payouts will be processed in the afternoon (UTC).

18.04.2013

Pool is recovering from DDoS attack.

14.04.2013

As announced in Getwork deprecation plan. the hashrate on Stratum is far above 90%, so workers which are still using the deprecated Getwork protocol are now charged by 10% fee. Please update your software and start using modern Stratum miners to reduce your fees back to 2%!

12.03.2013

Bitcoin network recently experienced global problems which caused some pool blocks to be invalid. Everything seems to be fixed now.

10.03.2013

Default mining URL for Stratum is stratum.bitcoin.cz:3333 . If you're still using api.bitcoin.cz, please fix your URL to prevent fallback to deprecated Getwork protocol.

08.03.2013

Stratum proxy version 1.5.2 has been released. This is bugfix release which add compatibility with some old miners (phoenix, Diablo).

03.03.2013

Stratum proxy version 1.5.0 has been released. All proxy users are encouraged to update .

13.02.2013

ASIC mining become a reality. Jeff Garzik (bitcoin core developer) is testing first shipped unit of Avalon ASIC miner on our pool.

30.01.2013

Native IPv6 address is now available. You can use ipv6.stratum.bitcoin.cz:3333 in your miner if your miners have IPv6 support! Please note that IPv6 works only for Stratum miners.

08.12.2012

If you're using old miners from early 2011 or you're mining on URL "mining.bitcoin.cz:8332", please update your miners and use "api.bitcoin.cz:8332" in your configuration instead. Mining on URL "mining.bitcoin.cz" is not working anymore.

27.11.2012

Only one day remains to halving block reward from 50 BTC to 25 BTC. Thanks to this change in Bitcoin world, mining income will be drastically reduced. As a countermeasure, pool is now paying block fees to miners. Everything you need to collect block fees is to use miner with Stratum support .

24.11.2012

Pool is now giving transaction fees to Stratum miners! Use miner with Stratum support (latest version of GUIminer, cgminer, bfgminer, poclbm) or use your favourite miner with Stratum proxy to improve your mining income!

19.11.2012

Guiminer with Stratum support has been released. Upgrade is highly recommended.

12.10.2012

All users are encouraged to install or update Stratum proxy to current stable version 1.1.1. Instructions are here .

12.10.2012

New version of cgminer has been released. Please update cgminer to version 2.8.3 . which fixes serious bugs introduced in previous versions.

10.10.2012

In effect from 01.11.2012, pool increases the lower limit for payouts ("send threshold") to 0.05 BTC (around $0.6) as a protection against high transaction fees for tiny payouts. If you have a balance of less than 0.05 BTC and want to withdraw them, please do so before November 1.

20.09.2012

New version of poclbm miner has been released. All poclbm users are encouraged to update their miner, latest version includes major optimization.

11.09.2012

I'm seeking for beta testers of new mining protocol called Stratum mining. If you want to join testing, please download the proxy and point your miners to it. Thank you!

08.07.2012

Do you have some bitcoins from the mining and do you want to sell them for cheap? Add your offer to localbitcoins.com and find a buyer in your neighborhood!

11.06.2012

Follow pool's page for recent updates and news!

05.02.2012

poclbm/GUI miner is affected by serious bug. If your miner is crashing on 'unexpected error' message, please follow miner forums for the newest versions.

26.01.2012

Pool is now supporting BIP 16 protocol extension, as described here. It is just internal change on the Bitcoin network, miners don't need to update anything.

08.11.2011

Implemented prioritization of long polling. Fast miners should expect lower stale ratio.

10.10.2011

Merged mining for Namecoins added. Please fill NMC address on your profile to start collecting Namecoins! Accounting isn't finished yet, but will come very soon.

03.10.2011

Bitcoin.cz is official sponsor of European Bitcoin conference 2011. See you on 25.-27. November in Prague!

26.03.2011

Second server added

Total hashrate at 60Ghash/s

19.01.2011

We're over 20 Ghash/s

20.12.2010

Technical Background more »

During mining, your computer runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header . For each new hash, the mining software will use a different number as the random element of the block header, this number is called the nonce . Depending on the nonce and what else is in the block the hashing function will yield a hash which looks like this:

You can look at this hash as a really long number. (It's a hexadecimal number, meaning the letters A-F are the digits 10-15.) Now to make mining difficult, there is what's called a difficulty target . To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is 1000000000000000000000000000000000000000000000000000000000000000, any number that starts with a zero would be below the target, e.g.:

If we lower the target to 0100000000000000000000000000000000000000000000000000000000000000, we now need two zeros in the beginning to be under it:

Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty . The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi had to do generating the first block. Though be fair though, back then mining was a lot slower and less optimized.

The difficulty changes every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That's why, when the network power rises, the difficulty rises as well.

Bitcoin Mining Hardware

CPU's: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. This method is no longer viable now that the network difficulty level is so high. You might mine for years and years without earning a single coin.

GPU's: Soon it was discovered that high end graphics cards were much more efficient at bitcoin mining and the landscape changed. CPU bitcoin mining gave way to the GPU (Graphical Processing Unit). The massively parallel nature of some GPUs allowed for a 50x to 100x increase in bitcoin mining power while using far less power per unit of work. While any modern GPU can be used to mine, the AMD line of GPU architecture turned out to be far superior to the nVidia architecture for mining bitcoins and the ATI Radeon HD 5870 turned out to be the most cost effective choice at the time.

FPGA's: As with the CPU to GPU transition, the bitcoin mining world progressed up the technology food chain to the Field Programmable Gate Array. With the successful launch of the Butterfly Labs FPGA ‘Single', the bitcoin mining hardware landscape gave way to specially manufactured hardware dedicated to mining bitcoins. While the FPGAs didn't enjoy a 50x - 100x increase in mining speed as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400w of power, whereas a typical FPGA mining device would provide a hashrate of 826 MH/s at 80w of power. That 5x improvement allowed the first large bitcoin mining farms to be constructed at an operational profit. The bitcoin mining industry was born.

ASIC's: The bitcoin mining world is now solidly in the Application Specific Integrated Circuit (ASIC) era. An ASIC is a chip designed specifically to do one thing and one thing only. Unlike FPGA's, an ASIC cannot be repurposed to perform other tasks. An ASIC designed to mine bitcoins can only mine bitcoins and will only ever mine bitcoins. The inflexibility of an ASIC is offset by the fact that it offers a 100x increase in hashing power while reducing power consumption compared to all the previous technologies. For example, a good bitcoin miner like the Monarch from Butterfly Labs provides 600 GH/s (1 Gigahash is 1000 Megahash. 1 GH/s = 1000 MH/s) while consuming 350w of power. Compared to the GPU era, this is an increase in hashrate and power savings of nearly 300x. (Calculate the earnings of any bitcoin mining hardware device using this bitcoin mining calculator ).

Unlike all the previous generations of hardware preceding ASIC, ASIC is the "end of the line" when it comes to disruptive technology. CPUs were replaced by GPUs which were in turn replaced by FPGAs which were replaced by ASICs. There is nothing to replace ASICs now or even in the immediate future. There will be stepwise refinement of the ASIC products and increases in efficiency, but nothing will offer the 50x - 100x increase in hashing power or 7x reduction in power usage that moves from previous technologies offered. This makes power consumption on an ASIC device the single most important factor of any ASIC product, as the expected useful lifetime of an ASIC mining device is longer than the entire history of bitcoin mining. It is conceivable that an ASIC device purchased today would still be mining in two years if the device is power efficient enough and the cost of electricity does not exceed it's output. Mining profitability is also dictated by the exchange rate, but under all circumstances the more power effecient the mining device, the more profitable it is.

Software

There are two basic ways to mine: On your own or as part of a pool. Almost all miners choose to mine on a pool because it takes the luck out of the process. Before you join a pool, make sure you have a bitcoin wallet so you have a place to store your bitcoins. Next you need to join a mining pool like Eclipse. Eligius or BTC Guild. With pool mining, the profit from any block a member generates is divided up among the members of the pool. This gives the pool members a more frequent, steady payout (this is called reducing your variance), but your payout(s) will be less unless you use a zero fee pool like Eclipse. Solo mining will give you large, infrequent payouts and pooled mining will give you small, frequent payouts, but both add up to the same amount if you're using a zero fee pool.

Once you have your client set up or you have registered with a pool, the next step is to set up the actual mining software. The most popular GPU/FPGA/ASIC miner at the moment is BFGminer or CGminer. For a full GUI experience, try EasyMiner .

If you want a quick taste of mining without installing any software, try Bitcoin Plus. a browser-based CPU Bitcoin miner. As a CPU miner it's not cost-efficient for serious mining, but it does illustrate the principle of pooled mining very well.

Thanks to:

Blitzboom and the guys from #bitcoin-dev for their help with writing the guide!

Beginners Guide to Mining Bitcoins

One of the biggest problems I ran into when I was looking to start mining Bitcoin for investment and profit was most of the sites were written for the advanced user. I am not a professional coder, I have no experience with Ubuntu, Linux and minimal experience with Mac. So, this is for the individual or group that wants to get started the easy way.

First thing you need to do is get a “Bitcoin Wallet”. Because Bitcoin is an internet based currency, you need a place to keep your Bitcoins. Got to http://www.bitcoin.org and download the Bitcoin client for your Operating System. Install it the client will begin to download the blockchain. Downloading the blockchain can take a long time and will be over 6GB of data. If you have data caps, I would recommend ordering a copy of the blockchain on DVD to keep from going over as it is growing exponentially. Click to order the bitcoin blockchain by mail. Once the client is up to date, click “New” to get your wallet address. It will be a long sequence of letters and numbers. One of most important things you can do is make sure you have a copy of the wallet.dat file on a thumb drive and print a copy out and keep it in a safe location. You can view a tutorial on how to create a secure wallet by clicking the link on the top of the page. The reason is that if you computer crashes and you do not have a copy of your wallet.dat file, you will lose all of your Bitcoins. They won’t go to someone else, they will disappear forever. It is like burning cash.

Now that you have a wallet and the client, you are probably roaring to go, but if you actually want to make Bitcoin (money), you probably need to join a pool. A pool is a group that combines their computing power to make more Bitcoins. The reason you shouldn’t go it alone is that Bitcoins are awarded in blocks, usually 50 at a time, and unless you get extremely lucky, you will not be getting any of those coins. In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn Bitcoins that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of Bitcoins and will be more likely to receive a good return on your investment.

The pool that I’m involved in is called Slush’s Pool so I will be giving instructions on how to join there but feel free to look at other options. Follow the link to go to their site and click the “Sign up here” link at the top of their site and follow their step by step instructions. After you have your account set up, you will need to add a “Worker”. Basically, for every miner that you have running, you will need to have a worker ID so the pool can keep track of your contributions.

If you are mining with an ASIC, please go to our Mining with ASICs page. The following will only pertain to GPU miners.

Most of the mining programs out there are pretty complicated to setup and will frustrate your average user. Recently a great program has come out to get the most basic of users started. The program is called GUIMiner. Click the link and download the program (Be careful, some of the ads are set up to look like the file download). Install and run the program and add in your information from Slush’s Pool. Remember that the user name is actually the worker name. The worker name will be your user name, dot, worker ID (username.worker ID) and the password from that worker ID.

Mac users should look into using Astroid

Now that you are set up, you can start mining. If you feel like you want to make more Bitcoins, you might want to invest in mining hardware.

To see how much your current hardware will earn mining Bitcoins, head over to the Bitcoin Profitability Calculator .

If you found this information helpful, please donate to 1G1ehppEgjiFTUSHFz2xs9KLSQuWLPYF2o

Bitcoin mining pool

Technical Background more »

During mining, your computer runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header . For each new hash, the mining software will use a different number as the random element of the block header, this number is called the nonce . Depending on the nonce and what else is in the block the hashing function will yield a hash which looks like this:

You can look at this hash as a really long number. (It's a hexadecimal number, meaning the letters A-F are the digits 10-15.) Now to make mining difficult, there is what's called a difficulty target . To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is 1000000000000000000000000000000000000000000000000000000000000000, any number that starts with a zero would be below the target, e.g.:

If we lower the target to 0100000000000000000000000000000000000000000000000000000000000000, we now need two zeros in the beginning to be under it:

Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty . The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi had to do generating the first block. Though be fair though, back then mining was a lot slower and less optimized.

The difficulty changes every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That's why, when the network power rises, the difficulty rises as well.

Bitcoin Mining Hardware

CPU's: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. This method is no longer viable now that the network difficulty level is so high. You might mine for years and years without earning a single coin.

GPU's: Soon it was discovered that high end graphics cards were much more efficient at bitcoin mining and the landscape changed. CPU bitcoin mining gave way to the GPU (Graphical Processing Unit). The massively parallel nature of some GPUs allowed for a 50x to 100x increase in bitcoin mining power while using far less power per unit of work. While any modern GPU can be used to mine, the AMD line of GPU architecture turned out to be far superior to the nVidia architecture for mining bitcoins and the ATI Radeon HD 5870 turned out to be the most cost effective choice at the time.

FPGA's: As with the CPU to GPU transition, the bitcoin mining world progressed up the technology food chain to the Field Programmable Gate Array. With the successful launch of the Butterfly Labs FPGA ‘Single', the bitcoin mining hardware landscape gave way to specially manufactured hardware dedicated to mining bitcoins. While the FPGAs didn't enjoy a 50x - 100x increase in mining speed as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400w of power, whereas a typical FPGA mining device would provide a hashrate of 826 MH/s at 80w of power. That 5x improvement allowed the first large bitcoin mining farms to be constructed at an operational profit. The bitcoin mining industry was born.

ASIC's: The bitcoin mining world is now solidly in the Application Specific Integrated Circuit (ASIC) era. An ASIC is a chip designed specifically to do one thing and one thing only. Unlike FPGA's, an ASIC cannot be repurposed to perform other tasks. An ASIC designed to mine bitcoins can only mine bitcoins and will only ever mine bitcoins. The inflexibility of an ASIC is offset by the fact that it offers a 100x increase in hashing power while reducing power consumption compared to all the previous technologies. For example, a good bitcoin miner like the Monarch from Butterfly Labs provides 600 GH/s (1 Gigahash is 1000 Megahash. 1 GH/s = 1000 MH/s) while consuming 350w of power. Compared to the GPU era, this is an increase in hashrate and power savings of nearly 300x. (Calculate the earnings of any bitcoin mining hardware device using this bitcoin mining calculator ).

Unlike all the previous generations of hardware preceding ASIC, ASIC is the "end of the line" when it comes to disruptive technology. CPUs were replaced by GPUs which were in turn replaced by FPGAs which were replaced by ASICs. There is nothing to replace ASICs now or even in the immediate future. There will be stepwise refinement of the ASIC products and increases in efficiency, but nothing will offer the 50x - 100x increase in hashing power or 7x reduction in power usage that moves from previous technologies offered. This makes power consumption on an ASIC device the single most important factor of any ASIC product, as the expected useful lifetime of an ASIC mining device is longer than the entire history of bitcoin mining. It is conceivable that an ASIC device purchased today would still be mining in two years if the device is power efficient enough and the cost of electricity does not exceed it's output. Mining profitability is also dictated by the exchange rate, but under all circumstances the more power effecient the mining device, the more profitable it is.

Software

There are two basic ways to mine: On your own or as part of a pool. Almost all miners choose to mine on a pool because it takes the luck out of the process. Before you join a pool, make sure you have a bitcoin wallet so you have a place to store your bitcoins. Next you need to join a mining pool like Eclipse. Eligius or BTC Guild. With pool mining, the profit from any block a member generates is divided up among the members of the pool. This gives the pool members a more frequent, steady payout (this is called reducing your variance), but your payout(s) will be less unless you use a zero fee pool like Eclipse. Solo mining will give you large, infrequent payouts and pooled mining will give you small, frequent payouts, but both add up to the same amount if you're using a zero fee pool.

Once you have your client set up or you have registered with a pool, the next step is to set up the actual mining software. The most popular GPU/FPGA/ASIC miner at the moment is BFGminer or CGminer. For a full GUI experience, try EasyMiner .

If you want a quick taste of mining without installing any software, try Bitcoin Plus. a browser-based CPU Bitcoin miner. As a CPU miner it's not cost-efficient for serious mining, but it does illustrate the principle of pooled mining very well.

Thanks to:

Blitzboom and the guys from #bitcoin-dev for their help with writing the guide!

Quick updates

02.02.2014

Datacenter connectivity issues have caused short drop in the hashrate. The problem has been resolved and all stratum servers are now reachable. This all happened when 900 Th/s was within a reach. We will get there again with your support and participation in mining ;-)

17.01.2014

We were having an extremely lucky yesterday's mining session. Unfortunately, around 1.30 AM UTC, we were experiencing stratum server issues that eventually spread across all our stratum servers. The problem has been resolved now and mining continues.

13.01.2014

The pool database backend has been successfully migrated to a new hardware. The website is now fully operational. The whole migration process has been accomplished without interrupting the actual mining.

13.01.2014

We are currently migrating pool database to a new machine. Mining will continue without interruption, only website will be down for 1-2 hours.

18.12.2013

Some recent payouts didn't go thru bitcoin network because of unsatisfied transaction fees. We're finding a soluton and all payouts will be processed soon

16.10.2013

In recent days we experienced some successful thefts of user's funds using compromised email accounts. We strongly encourage all users to change email passwords. There's no reason to think that pool security itself has been compromised.

08.07.2013

Getwork protocol support ended. Please be sure your miners support Stratum protocol. You can still use your old getwork miners with Stratum proxy installed on your mining rig.

21.05.2013

Bug in bitcoind caused many invalid blocks generated in recent hours. Thanks to cooperation with bitcoin developers, a bugfix has been deployed. Pool is now back in normal operation.

26.04.2013

Because the user database has been compromised in recent hack, please change password to your pool account!

25.04.2013

Pool is recovering to normal operation from previous attack. delayed payouts will be processed in the afternoon (UTC).

18.04.2013

Pool is recovering from DDoS attack.

14.04.2013

As announced in Getwork deprecation plan. the hashrate on Stratum is far above 90%, so workers which are still using the deprecated Getwork protocol are now charged by 10% fee. Please update your software and start using modern Stratum miners to reduce your fees back to 2%!

12.03.2013

Official BTC Bitcoin Robot Review See Egor Kotove Explain How The BTC Robot Works

Bitcoin network recently experienced global problems which caused some pool blocks to be invalid. Everything seems to be fixed now.

10.03.2013

Default mining URL for Stratum is stratum.bitcoin.cz:3333 . If you're still using api.bitcoin.cz, please fix your URL to prevent fallback to deprecated Getwork protocol.

08.03.2013

Stratum proxy version 1.5.2 has been released. This is bugfix release which add compatibility with some old miners (phoenix, Diablo).

03.03.2013

Stratum proxy version 1.5.0 has been released. All proxy users are encouraged to update .

13.02.2013

ASIC mining become a reality. Jeff Garzik (bitcoin core developer) is testing first shipped unit of Avalon ASIC miner on our pool.

30.01.2013

Native IPv6 address is now available. You can use ipv6.stratum.bitcoin.cz:3333 in your miner if your miners have IPv6 support! Please note that IPv6 works only for Stratum miners.

08.12.2012

If you're using old miners from early 2011 or you're mining on URL "mining.bitcoin.cz:8332", please update your miners and use "api.bitcoin.cz:8332" in your configuration instead. Mining on URL "mining.bitcoin.cz" is not working anymore.

27.11.2012

Only one day remains to halving block reward from 50 BTC to 25 BTC. Thanks to this change in Bitcoin world, mining income will be drastically reduced. As a countermeasure, pool is now paying block fees to miners. Everything you need to collect block fees is to use miner with Stratum support .

24.11.2012

Pool is now giving transaction fees to Stratum miners! Use miner with Stratum support (latest version of GUIminer, cgminer, bfgminer, poclbm) or use your favourite miner with Stratum proxy to improve your mining income!

19.11.2012

Guiminer with Stratum support has been released. Upgrade is highly recommended.

12.10.2012

All users are encouraged to install or update Stratum proxy to current stable version 1.1.1. Instructions are here .

12.10.2012

New version of cgminer has been released. Please update cgminer to version 2.8.3 . which fixes serious bugs introduced in previous versions.

10.10.2012

In effect from 01.11.2012, pool increases the lower limit for payouts ("send threshold") to 0.05 BTC (around $0.6) as a protection against high transaction fees for tiny payouts. If you have a balance of less than 0.05 BTC and want to withdraw them, please do so before November 1.

20.09.2012

New version of poclbm miner has been released. All poclbm users are encouraged to update their miner, latest version includes major optimization.

11.09.2012

I'm seeking for beta testers of new mining protocol called Stratum mining. If you want to join testing, please download the proxy and point your miners to it. Thank you!

08.07.2012

Do you have some bitcoins from the mining and do you want to sell them for cheap? Add your offer to localbitcoins.com and find a buyer in your neighborhood!

11.06.2012

Follow pool's page for recent updates and news!

05.02.2012

poclbm/GUI miner is affected by serious bug. If your miner is crashing on 'unexpected error' message, please follow miner forums for the newest versions.

26.01.2012

Pool is now supporting BIP 16 protocol extension, as described here. It is just internal change on the Bitcoin network, miners don't need to update anything.

08.11.2011

Implemented prioritization of long polling. Fast miners should expect lower stale ratio.

10.10.2011

Merged mining for Namecoins added. Please fill NMC address on your profile to start collecting Namecoins! Accounting isn't finished yet, but will come very soon.

03.10.2011

Bitcoin.cz is official sponsor of European Bitcoin conference 2011. See you on 25.-27. November in Prague!

26.03.2011

Second server added

Total hashrate at 60Ghash/s

19.01.2011

We're over 20 Ghash/s

20.12.2010

How To Mine Bitcoins

Twitter Pushes Android App Update To Fix The “Me” Tab Bug

Mining bitcoins – a process that helps manage bitcoin transactions as well as create new “wealth” – is the new Beanie Babies. Luckily for us, however, bitcoins seem to be going up in value and should maintain their value over time, unlike your mint condition Tiny the stuffed Chihuahua.

But how do you get bitcoins? You can begin by buying them outright, but the market is currently wild. At $188 per coin, the direction of the bitcoin is anyone’s guess right now and, unlike equities, these things don’t split. In short, you should probably mine. But what is bitcoin mining?

Think of it as work done by groups of people to find large prime numbers or trying keys to decrypt a file. You can read a lot more about it here but just understand that for every block mined you get 25 coins or, at current rates, $4,722.25. Currently a single bitcoin is valued at $188, an alarming result that is probably caused by money movements related to Cyprus and a general bubble-like excitement over the platform in general. In fact, many wager that the DDOS attacks on many bitcoin-related services are direct action by hackers to inject instability in order to reduce the price.

As it stands, mining solo is very nearly deprecated. The process of finding blocks is now so popular and the difficulty of finding a block so high that it could take over three years to generate any coins. While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual bitcoins are worth.

Pooled mining, however, is far more lucrative. Using a service like “Slush’s pool” (more on that later) you can split the work among a ground of people. Using this equation:

(25 BTC + block fees – 2% fee) * (shares found by user’s workers) / (total shares in current round)

While this is simplified, it is basically how the system works. You work for shares in a block and when complete you get a percentage of the block based on the number of workers alongside you, less fees. Using this method, I have been able to raise about $1.50 over the weekend by running a dormant PC. The astute among you will note that I probably used twice that amount of electricity.

Being a neophile, I’m surprised it took me so long to start mining. My buddy Tom explained how to set up a pooled mining account so I thought it would be interesting to share the instructions.

1. Get a wallet. You can either store your wallet locally or store it online. Coinbase.com is an online wallet that is surprisingly simple to set up. Wallets require you to use or download a fairly large blockchain file – about 6GB – so downloading and updating a local wallet may be a non-starter. Like all wealth storage mediums, keeping your bitcoins “local” is probably a better idea than trusting a web service, but that’s a matter of private preference. There is no preferred wallet type and there are obvious trade-offs to both. Privacy advocates would probably say a local wallet is best.

You can download a local wallet here but make sure you keep a copy of your data backed up.

Once you’ve created a wallet, you get an address like this: 1BEkUGADFbrEShQb9Xr4pKPtM8jAyiNQsJ. This, without the period, is a direct way to send bitcoins to your wallet. Make a note of your address. In Coinbase, the wallet address found under linked accounts.

2. Join a pool. To mine in a pool you have to work with a group of other miners on available blocks. The most popular is Slush’s Pool found here. You can also try guilds like BTC Guild as well as a number of other options. Each of the pools is characterized mostly by the fees they charge per block – 2% for Slush’s pool, for example – and the number of users. Pools with fewer users could also have a slower discovery time but pools with many users usually result in smaller payments.

How can you be sure the pool owner doesn’t steal all your bitcoins? You can’t. However, as one pool owner, Slush, notes:

In theory, as the Bitcoin pool operator, I could keep the 25 BTC from a block found by the pool for myself. I’m not going to do this, but I completely accept that people do not trust the pool operator. It is their freedom of choice, and Bitcoin is about freedom.

For simplicity’s sake, I’m using Slush’s Pool and have created three workers. First, create a pool login. Then add workers. The workers are sub-accounts with their own passwords and are usually identified by [yourlogin].[workername]. I have three workers running, currently – one on my iMac and two on my old PC.

You must create workers to mine. The instructions are very straightforward for most services so don’t become overwhelmed. Like any online club, you can dig deeply into the subculture surround bitcoin as you gain experience. I like to think of it as a financial MMORPG.

Also be sure to enter your wallet address into the pool information. This will ensure you get your bitcoins.

3. Get a miner. There are a number of mining options for multiple platforms although OSX users may find themselves in a bit of a pickle. Miners use spare GPU cycles to power the mining operation, much like services like SETI@Home uses spare cycles for finding intelligent life. Miners, on the other hand, use these cycles to help handle peer-to-peer processes associated with bitcoins. Thus by doing “work” you are maintaining the network as well.

GUIMiner is the simplest solution for Windows users as it allows you to create miners using almost all standard graphics cards. You can download it here. 50Miner is also a popular solution. Both require you to enter your worker info and pool and they’ll start mining.

Linux users can run miners like CGMiner. An excellent guide to installing a miner on Ubuntu is available here .

OS X users can use DiabloMiner. a two-year old command-line program that will mine using OpenCL. Sadly, it uses deprecated calls to Bitcoin and is quite a bit slower. As a result, you need to run your own proxy, Stratum. that allows Diablo to connect with services like Slush’s pool. Both of these programs usually run without issue on OS X although you may need to install OpenCL for OSX .

To mine I’ve created a script that I run in Terminal that simply runs the proxy in the background and then connects Diablo. Note the last two arguments are necessary for Mountain Lion.

/stratum-mining-proxy-master/mining_proxy.py &

/DiabloMiner-OSX.sh -u WORKERNAME -p WORKERPASSWORD -o localhost -r 8332 -w 64 -na

RPCMiner is far easier to run – you simply click an icon and enter some data – and both have very rudimentary, text-based interfaces. Running Diablo on my iMac has not had much effect on application performance under OS X although it does slow down my Windows 8 machine considerably.

4. Keep your mind on your money. Bitcoins are baffling in that they are wildly simple to use and mine. Speculators, then, would probably be able to throw hundreds of machines at the problem and gather bitcoins like raindrops, right? Wrong. As more bitcoins are found, they become more difficult to find. This profitability calculator will help you understand what you’re up against but understand that this isn’t a sure thing. I’ve run my systems for a weekend and seen a mere $1.50 – enough for a coke – but other users may have improved hardware and methods to succeed. In short, if it costs more to run your hardware than you gain in bitcoins, you’re probably doing something wrong.

Good luck in your journey and enjoy your first foray into this wild and wooly world.

Beginners Guide to Mining Bitcoins

One of the biggest problems I ran into when I was looking to start mining Bitcoin for investment and profit was most of the sites were written for the advanced user. I am not a professional coder, I have no experience with Ubuntu, Linux and minimal experience with Mac. So, this is for the individual or group that wants to get started the easy way.

First thing you need to do is get a “Bitcoin Wallet”. Because Bitcoin is an internet based currency, you need a place to keep your Bitcoins. Got to http://www.bitcoin.org and download the Bitcoin client for your Operating System. Install it the client will begin to download the blockchain. Downloading the blockchain can take a long time and will be over 6GB of data. If you have data caps, I would recommend ordering a copy of the blockchain on DVD to keep from going over as it is growing exponentially. Click to order the bitcoin blockchain by mail. Once the client is up to date, click “New” to get your wallet address. It will be a long sequence of letters and numbers. One of most important things you can do is make sure you have a copy of the wallet.dat file on a thumb drive and print a copy out and keep it in a safe location. You can view a tutorial on how to create a secure wallet by clicking the link on the top of the page. The reason is that if you computer crashes and you do not have a copy of your wallet.dat file, you will lose all of your Bitcoins. They won’t go to someone else, they will disappear forever. It is like burning cash.

Now that you have a wallet and the client, you are probably roaring to go, but if you actually want to make Bitcoin (money), you probably need to join a pool. A pool is a group that combines their computing power to make more Bitcoins. The reason you shouldn’t go it alone is that Bitcoins are awarded in blocks, usually 50 at a time, and unless you get extremely lucky, you will not be getting any of those coins. In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn Bitcoins that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of Bitcoins and will be more likely to receive a good return on your investment.

The pool that I’m involved in is called Slush’s Pool so I will be giving instructions on how to join there but feel free to look at other options. Follow the link to go to their site and click the “Sign up here” link at the top of their site and follow their step by step instructions. After you have your account set up, you will need to add a “Worker”. Basically, for every miner that you have running, you will need to have a worker ID so the pool can keep track of your contributions.

If you are mining with an ASIC, please go to our Mining with ASICs page. The following will only pertain to GPU miners.

Most of the mining programs out there are pretty complicated to setup and will frustrate your average user. Recently a great program has come out to get the most basic of users started. The program is called GUIMiner. Click the link and download the program (Be careful, some of the ads are set up to look like the file download). Install and run the program and add in your information from Slush’s Pool. Remember that the user name is actually the worker name. The worker name will be your user name, dot, worker ID (username.worker ID) and the password from that worker ID.

Mac users should look into using Astroid

Now that you are set up, you can start mining. If you feel like you want to make more Bitcoins, you might want to invest in mining hardware.

To see how much your current hardware will earn mining Bitcoins, head over to the Bitcoin Profitability Calculator .

If you found this information helpful, please donate to 1G1ehppEgjiFTUSHFz2xs9KLSQuWLPYF2o

Bitcoin mining gpu

Technical Background more »

During mining, your computer runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header . For each new hash, the mining software will use a different number as the random element of the block header, this number is called the nonce . Depending on the nonce and what else is in the block the hashing function will yield a hash which looks like this:

You can look at this hash as a really long number. (It's a hexadecimal number, meaning the letters A-F are the digits 10-15.) Now to make mining difficult, there is what's called a difficulty target . To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is 1000000000000000000000000000000000000000000000000000000000000000, any number that starts with a zero would be below the target, e.g.:

If we lower the target to 0100000000000000000000000000000000000000000000000000000000000000, we now need two zeros in the beginning to be under it:

Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty . The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi had to do generating the first block. Though be fair though, back then mining was a lot slower and less optimized.

The difficulty changes every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That's why, when the network power rises, the difficulty rises as well.

Bitcoin Mining Hardware

CPU's: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. This method is no longer viable now that the network difficulty level is so high. You might mine for years and years without earning a single coin.

GPU's: Soon it was discovered that high end graphics cards were much more efficient at bitcoin mining and the landscape changed. CPU bitcoin mining gave way to the GPU (Graphical Processing Unit). The massively parallel nature of some GPUs allowed for a 50x to 100x increase in bitcoin mining power while using far less power per unit of work. While any modern GPU can be used to mine, the AMD line of GPU architecture turned out to be far superior to the nVidia architecture for mining bitcoins and the ATI Radeon HD 5870 turned out to be the most cost effective choice at the time.

FPGA's: As with the CPU to GPU transition, the bitcoin mining world progressed up the technology food chain to the Field Programmable Gate Array. With the successful launch of the Butterfly Labs FPGA ‘Single', the bitcoin mining hardware landscape gave way to specially manufactured hardware dedicated to mining bitcoins. While the FPGAs didn't enjoy a 50x - 100x increase in mining speed as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400w of power, whereas a typical FPGA mining device would provide a hashrate of 826 MH/s at 80w of power. That 5x improvement allowed the first large bitcoin mining farms to be constructed at an operational profit. The bitcoin mining industry was born.

ASIC's: The bitcoin mining world is now solidly in the Application Specific Integrated Circuit (ASIC) era. An ASIC is a chip designed specifically to do one thing and one thing only. Unlike FPGA's, an ASIC cannot be repurposed to perform other tasks. An ASIC designed to mine bitcoins can only mine bitcoins and will only ever mine bitcoins. The inflexibility of an ASIC is offset by the fact that it offers a 100x increase in hashing power while reducing power consumption compared to all the previous technologies. For example, a good bitcoin miner like the Monarch from Butterfly Labs provides 600 GH/s (1 Gigahash is 1000 Megahash. 1 GH/s = 1000 MH/s) while consuming 350w of power. Compared to the GPU era, this is an increase in hashrate and power savings of nearly 300x. (Calculate the earnings of any bitcoin mining hardware device using this bitcoin mining calculator ).

Unlike all the previous generations of hardware preceding ASIC, ASIC is the "end of the line" when it comes to disruptive technology. CPUs were replaced by GPUs which were in turn replaced by FPGAs which were replaced by ASICs. There is nothing to replace ASICs now or even in the immediate future. There will be stepwise refinement of the ASIC products and increases in efficiency, but nothing will offer the 50x - 100x increase in hashing power or 7x reduction in power usage that moves from previous technologies offered. This makes power consumption on an ASIC device the single most important factor of any ASIC product, as the expected useful lifetime of an ASIC mining device is longer than the entire history of bitcoin mining. It is conceivable that an ASIC device purchased today would still be mining in two years if the device is power efficient enough and the cost of electricity does not exceed it's output. Mining profitability is also dictated by the exchange rate, but under all circumstances the more power effecient the mining device, the more profitable it is.

Software

There are two basic ways to mine: On your own or as part of a pool. Almost all miners choose to mine on a pool because it takes the luck out of the process. Before you join a pool, make sure you have a bitcoin wallet so you have a place to store your bitcoins. Next you need to join a mining pool like Eclipse. Eligius or BTC Guild. With pool mining, the profit from any block a member generates is divided up among the members of the pool. This gives the pool members a more frequent, steady payout (this is called reducing your variance), but your payout(s) will be less unless you use a zero fee pool like Eclipse. Solo mining will give you large, infrequent payouts and pooled mining will give you small, frequent payouts, but both add up to the same amount if you're using a zero fee pool.

Once you have your client set up or you have registered with a pool, the next step is to set up the actual mining software. The most popular GPU/FPGA/ASIC miner at the moment is BFGminer or CGminer. For a full GUI experience, try EasyMiner .

If you want a quick taste of mining without installing any software, try Bitcoin Plus. a browser-based CPU Bitcoin miner. As a CPU miner it's not cost-efficient for serious mining, but it does illustrate the principle of pooled mining very well.

Thanks to:

Blitzboom and the guys from #bitcoin-dev for their help with writing the guide!

Quick updates

02.02.2014

Datacenter connectivity issues have caused short drop in the hashrate. The problem has been resolved and all stratum servers are now reachable. This all happened when 900 Th/s was within a reach. We will get there again with your support and participation in mining ;-)

17.01.2014

We were having an extremely lucky yesterday's mining session. Unfortunately, around 1.30 AM UTC, we were experiencing stratum server issues that eventually spread across all our stratum servers. The problem has been resolved now and mining continues.

13.01.2014

The pool database backend has been successfully migrated to a new hardware. The website is now fully operational. The whole migration process has been accomplished without interrupting the actual mining.

13.01.2014

We are currently migrating pool database to a new machine. Mining will continue without interruption, only website will be down for 1-2 hours.

18.12.2013

Some recent payouts didn't go thru bitcoin network because of unsatisfied transaction fees. We're finding a soluton and all payouts will be processed soon

16.10.2013

In recent days we experienced some successful thefts of user's funds using compromised email accounts. We strongly encourage all users to change email passwords. There's no reason to think that pool security itself has been compromised.

08.07.2013

Getwork protocol support ended. Please be sure your miners support Stratum protocol. You can still use your old getwork miners with Stratum proxy installed on your mining rig.

21.05.2013

Bug in bitcoind caused many invalid blocks generated in recent hours. Thanks to cooperation with bitcoin developers, a bugfix has been deployed. Pool is now back in normal operation.

26.04.2013

Because the user database has been compromised in recent hack, please change password to your pool account!

25.04.2013

Pool is recovering to normal operation from previous attack. delayed payouts will be processed in the afternoon (UTC).

18.04.2013

Pool is recovering from DDoS attack.

14.04.2013

As announced in Getwork deprecation plan. the hashrate on Stratum is far above 90%, so workers which are still using the deprecated Getwork protocol are now charged by 10% fee. Please update your software and start using modern Stratum miners to reduce your fees back to 2%!

12.03.2013

Bitcoin network recently experienced global problems which caused some pool blocks to be invalid. Everything seems to be fixed now.

10.03.2013

Default mining URL for Stratum is stratum.bitcoin.cz:3333 . If you're still using api.bitcoin.cz, please fix your URL to prevent fallback to deprecated Getwork protocol.

08.03.2013

Stratum proxy version 1.5.2 has been released. This is bugfix release which add compatibility with some old miners (phoenix, Diablo).

03.03.2013

Stratum proxy version 1.5.0 has been released. All proxy users are encouraged to update .

13.02.2013

ASIC mining become a reality. Jeff Garzik (bitcoin core developer) is testing first shipped unit of Avalon ASIC miner on our pool.

30.01.2013

Native IPv6 address is now available. You can use ipv6.stratum.bitcoin.cz:3333 in your miner if your miners have IPv6 support! Please note that IPv6 works only for Stratum miners.

08.12.2012

If you're using old miners from early 2011 or you're mining on URL "mining.bitcoin.cz:8332", please update your miners and use "api.bitcoin.cz:8332" in your configuration instead. Mining on URL "mining.bitcoin.cz" is not working anymore.

27.11.2012

Only one day remains to halving block reward from 50 BTC to 25 BTC. Thanks to this change in Bitcoin world, mining income will be drastically reduced. As a countermeasure, pool is now paying block fees to miners. Everything you need to collect block fees is to use miner with Stratum support .

24.11.2012

Pool is now giving transaction fees to Stratum miners! Use miner with Stratum support (latest version of GUIminer, cgminer, bfgminer, poclbm) or use your favourite miner with Stratum proxy to improve your mining income!

19.11.2012

Guiminer with Stratum support has been released. Upgrade is highly recommended.

12.10.2012

Manni's GPU Bitcoin Mining Rig Farm 16GH s

All users are encouraged to install or update Stratum proxy to current stable version 1.1.1. Instructions are here .

12.10.2012

New version of cgminer has been released. Please update cgminer to version 2.8.3 . which fixes serious bugs introduced in previous versions.

10.10.2012

In effect from 01.11.2012, pool increases the lower limit for payouts ("send threshold") to 0.05 BTC (around $0.6) as a protection against high transaction fees for tiny payouts. If you have a balance of less than 0.05 BTC and want to withdraw them, please do so before November 1.

20.09.2012

New version of poclbm miner has been released. All poclbm users are encouraged to update their miner, latest version includes major optimization.

11.09.2012

I'm seeking for beta testers of new mining protocol called Stratum mining. If you want to join testing, please download the proxy and point your miners to it. Thank you!

08.07.2012

Do you have some bitcoins from the mining and do you want to sell them for cheap? Add your offer to localbitcoins.com and find a buyer in your neighborhood!

11.06.2012

Follow pool's page for recent updates and news!

05.02.2012

poclbm/GUI miner is affected by serious bug. If your miner is crashing on 'unexpected error' message, please follow miner forums for the newest versions.

26.01.2012

Pool is now supporting BIP 16 protocol extension, as described here. It is just internal change on the Bitcoin network, miners don't need to update anything.

08.11.2011

Implemented prioritization of long polling. Fast miners should expect lower stale ratio.

10.10.2011

Merged mining for Namecoins added. Please fill NMC address on your profile to start collecting Namecoins! Accounting isn't finished yet, but will come very soon.

03.10.2011

Bitcoin.cz is official sponsor of European Bitcoin conference 2011. See you on 25.-27. November in Prague!

26.03.2011

Second server added

Total hashrate at 60Ghash/s

19.01.2011

We're over 20 Ghash/s

20.12.2010

Bitcoin Currency and GPU Mining Performance Comparison

What is a Bitcoin?

This article looking at Bitcoins and the performance of various GPUs with mining them was really a big team effort at PC Perspective. Props goes out to Tim Verry for doing the research on the process of mining and helping to explain what Bitcoins are all about. Ken Addison did a great job doing through an alottment of graphics cards running our GUIMiner and getting the data you will see presented later. Scott Michaud helped with some graphics and imagery and I'm the monkey that just puts it all together at the end.

** Update 7/13/11 ** We recently wrote another piece on the cost of the power to run our Bitcoin mining operations used in this performance article. Based on the individual prices of electric in all 50 states of the US, we found that the cost of the power to run some cards exceeded the value of the Bitcoin currency based on today's exchange rates. I would highly recommend you check out that story as well after giving this performance-based article a thorough reading. ** End Update **

A new virtual currency called Bitcoin has been receiving a great deal of news fanfare, criticism and user adoption. The so called cryptographic currency uses strong encryption methods to eliminate the need for trust when buying and selling goods over the Internet in addition to a peer-to-peer distributed timestamp server that maintains a public record of every transaction to prevent double spending of the electronic currency. The aspect of Bitcoin that has caused the most criticism and recent large rise in growth lies in is its inherent ability to anonymize the real life identities of users (though the transactions themselves are public) and the ability to make money by supporting the Bitcoin network in verifying pending transactions through a process called “mining” respectively. Privacy, security, cutting out the middle man and making it easy for users to do small casual transactions without fees as well as the ability to be rewarded for helping to secure the network by mining are all selling points (pun intended) of the currency.

When dealing with a more traditional and physical local currency, there is a need to for both parties to trust the currency but not much need to trust each other as handing over cash is fairly straightforward. One does not need to trust the other person as much as if it were a check which could bounce. Once it has changed hands, the buyer can not go and spend that money elsewhere as it is physically gone. Transactions over the Internet; however, greatly reduce the convenience of that local currency, and due to the series of tubes’ inability to carry cash through the pipes, services like Paypal as well as credit cards and checks are likely to be used in its place. While these replacements are convenient, they also are much riskier than cash as fraudulent charge-backs and disputes are likely to occur, leaving the seller in a bad position. Due to this risk, sellers have to factor a certain percentage of expected fraud into their prices in addition to collecting as much personally identifiable information as possible. Bitcoin seeks to remedy these risks by bringing the convenience of a local currency to the virtual plane with irreversible transactions, a public record of all transactions, and the ability to trust strong cryptography instead of the need for trusting people.

There are a number of security measures inherent in the Bitcoin protocol that assist with these security goals. Foremost, bitcoin uses strong public and private key cryptography to secure coins to a user. Money is handled by a bitcoin wallet, which is a program such as the official bitcoin client that creates public/private key pairs that allow you to send and receive money. You are further able to generate new receiving addresses whenever you want within the client. The wallet.dat file is the record of all your key pairs and thus your bitcoins and contains 100 address/key pairs (though you are able to generate new ones beyond that). Then, to send money one only needs to sign the bitcoin with their private key and send it to the recipient’s public key. This creates a chain of transactions that are secured by these public and private key pairs from person to person. Unfortunately this cryptography alone is not able to prevent double spending, meaning that Person A could sign the bitcoin with his private key to Person B, but also could do the same to Person C and so on. This issue is where the peer-to-peer and distributed computing aspect of the bitcoin protocol come into play. By using a peer-to-peer distributed timestamp server, the bitcoin protocol creates a public record of every transaction that prevents double spending of bitcoins. Once the bitcoin has been signed to a public key (receiving address) with the user’s private key, and the network confirms this transaction the bitcoins can no longer be spent by Person A as the network has confirmed that the coin belongs to Person B now, and they are the only ones that can spend it using their private key.

The privacy and anonymity afforded by the bitcoin protocol has received flak recently due to the currency being used to purchase illegal drugs and other products online. The US government has seen a number of members speak out against the currency because of the illegal drug involvement and taxation implications. However, bitcoin is not the only currency that is used by a number of people for illegal uses, and it is certainly not representative of a majority of illegal usage. Regardless of the relatively small number of illegal uses, the privacy afforded by bitcoin is not inherently a bad thing. As the Internet equivalent to a local currency such as cash, bitcoin is able to facilitate a much higher level of anonymity than other currencies used online. The privacy implications are not only good for those mis-using it for nefarious purposes; it is actually a good thing for legal transactions because sellers do not need to collect nearly as much personally identifiable information in order to trust the buyer enough to go through with the sale. Traditionally, telephone numbers, addresses, financial information, and other personal information has been required in order for even the most mundane transactions over the Internet as sellers needed to protect themselves as much as possible from fraud.