“No Country for Old Miners” – Tales of Earlier Days of Bitcoin Mining

Written by: David Moon on June 19, 2013.

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[David Moon: Spelunkin is generally designed to appeal "outwards" towards the next group of cryptocurrency adopters and the economic, social, and cultural shift that rises around them as a result. However for added perspective, we will also sometimes look back into the origins of cryptocurrencies either by speaking with or, as in this case, allowing someone who was present in that scene to relate their story directly. Today we have an essay from Ho Lum Cheung, aka "thoughtcourier" on both bitcointalk and Reddit who recounts his days as a Bitcoin miner starting around 2011. I have added small comments within brackets and made minor text edits for clarity.]

“No Country for Old Miners” by Ho Lum Cheung

“Turn spare processing power and electricity into money!” That’s the pitch that sold Bitcoin to the miners in the early days. And even though it was still being broadcast when I joined the party in May of 2011, it was already obsolete. By that time, faster and more efficient Bitcoin mining, done by graphics cards [GPUs], was in full force, and the new pitch was “Pay off your sweet new AMD video card by mining Bitcoins!” And now that pitch is also but a passing memory. After some flirtation with FPGAs [customizable chips that mine faster than GPUs], the mining community has moved on to ASIC technologies, leaving those of us with 7970s and 5830s [high-end models of GPUs] behind. Today I want to tell you how I got started Bitcoin mining, and I will make every effort to enamor you with the thrill of a get-rich-quick narrative. However, I’m not writing to boast; mining has evolved into a serious and costly endeavor, and I hope that you will find some insight into the uncommon values we share.

First, a brief primer on Bitcoin mining: Bitcoin mining is the process by which we write transactions into the Bitcoin public ledger. Each set of transactions we write is a block, and we can only write a new block after computing a cryptographic (sha-256d) hash that matches a certain pattern (starts with at least a certain number of zeros). This requirement helps secure the validity of a block, but there is no intrinsic motivation to calculate it. Why anyone would compute a hash at all is a large part of Satoshi’s genius; the biggest protection afforded Bitcoin is the rational self-interest of its users. For Bitcoin mining, the protocol rewards the person who finds a qualifying hash the fastest with freshly minted Bitcoins (formerly 50, now 25), and they also receive the transaction fees for the transactions in that block.

Source: spelunk.in