Find the latest bookmaker offers available across all uk gambling sites - Bets.Zone - Betting Zone Use our complete list of trusted and reputable operators to see at a glance the best casino, poker, sport and bingo bonuses available online.The digital currency Bitcoin was invented in 2008 and began making headlines in 2013, attracting converts and speculators alike.Bitcoins are “mined” using powerful computers that solve mathematical formulae to generate pieces of computer code that represent financial value.The process of mining them profitably requires such immense computer power that “server farms” full of hundreds of machines, all accompanied by fans blowing nonstop to keep them cool, must be set up in warehouses.Once created, Bitcoins are tradable in some markets, though many countries have banned or restricted the use of Bitcoins, and the People’s Bank of China (PBOC) banned commercial banks from dealing in the currency in 2014.Nevertheless, China has become one of the world’s leading markets for and producers of Bitcoin.

In 2013, the price of one Bitcoin exceeded $1,000.As irrational exuberance over the virtual currency subsided, the price fell to below $200, but in recent months, it has been on the rise again.It’s currently back up above $750.We talked to Eric Mu, a Chinese entrepreneur who runs SinoHash, a Bitcoin mining facility in China, and says he became engrossed with the idea of a monetary system that could bypass the state.China provides a natural place for Bitcoin to take off, Mu believes, and he has staked out his plot in the virtual mining community while Chinese regulators have been content with a soft approach.Jeremy: What is SinoHash, and what is your role?Eric: SinoHash is a Bitcoin mining facility based in China.Like other mining facilities, it generates revenue in Bitcoin by running a large amount of dedicated computing equipment that consumes a large amount of electricity — one megawatt in our case.In the Bitcoin system, mining serves the function of securing the network against fraudulent transactions and miners are rewarded for contributing this utility.

SinoHash is also a miner hosting service — customers buy hardware equipment and ship them to our facility.We operate them and charge $0.045 for every kWh of electricity their machines consume.This service is not unique for people who are familiar with the space.There are facilities located in the United States, too.Our facility is located in Shimian, Ya’an Prefecture in Sichuan Province.The decision was made mainly due to the cool climate and cheap power supply.bitcoin community sydneyOur cheap electricity is a main draw for clients.litecoin wallet sendAlso, most households don’t have the space or time required for the upkeep of a large number of mining rigs, which generate a great amount of heat and an unpleasant level of noise.bitcoin oaklandBut we have appealed to a small group of investors and it has been fairly lucrative over the past few years.bitcoin cpanel

Jeremy: How did you get into the Bitcoin business?Eric: I first learned about Bitcoin in 2013 and quickly grew engrossed with it.The idea of government-less currency resonated with me and I began to look for ways to get more involved.I tried a few jobs at Bitcoin startups and this eventually led to building my own Bitcoin mining facility and hosting service.Jeremy: How would you describe the Chinese government’s attitude to and regulation of Bitcoin and other cryptocurrencies?bitcoin norway studentEric: The Chinese government doesn’t have an explicitly formulated attitude as far as I know toward Bitcoin and the industry at large.bitcoins wat zijn hetThere is evidence that it is concerned with a potential speculative bubble, which is often attributed to its ban of banks from directly handling Bitcoin-related business.Some government departments, the People’s Bank of China in particular, have recognized the innovativeness of the technology and dedicated resources to studying it, in an apparent bid to apply its underlying technology — blockchain — in building its own digital currency.

When it comes to mining, there is little regulation and interference.Personally, I think that Bitcoin has outgrown the stage where a single government can profoundly affect its development, so I am not too concerned with the Chinese government’s attitude.Jeremy: How many people do you estimate are trading Bitcoin and other cryptocurrencies in China?Eric: Due to the nature of Bitcoin, there has been lack of reliable data in this regard.There is a small group of frequent day traders — my guess is a few tens of thousands.Meanwhile, there is a much larger population of people who occasionally buy and sell to fulfill a need.They often do this through face-to-face transactions or social payment tools, which is very hard to monitor.I, for example, often facilitate people to buy Bitcoins using WeChat payment.I have a friend, an American expat living in Beijing, who regularly buys Bitcoins worth tens of thousands in yuan every month through me, and he has done this consistently for at least eight months.

Jeremy: Why has Bitcoin become so popular in China?Eric: China has all the right conditions for it to grow.Here are some of what I think are the most important factors: a large internet-savvy population, cheap and abundant hydropower, mature electrical manufacturing, capital control and a depreciating currency.Historically, the savings rate is much higher here and Bitcoin has proven to be a resilient store of value.But I wouldn’t advance the argument that Bitcoin is more popular in China than elsewhere.Some of the most well funded startups in the space are probably in the United States.Jeremy: How much do you think one Bitcoin will be worth in one year’s time?Eric: I think it has a good chance to exceed the USD1,000 mark once again.After that, the sky is the limit.[Note: the following overview on known Bitcoin mining farms was originally included in a new paper but needed to be removed for space and flow considerations] Several validators on the Bitcoin network, as well as many watermarked token issuers, are identifiable and known.

What does this mean?Many Bitcoin validators are drifting usage outside the pseudonymous context of the original network due to their use of specialty equipment that creates a paper trail.In other words, pseudonymity has given way to real world identity.Soon issuers of color will likely follow because they too have strong ties to the physical, off-chain world.For instance, on August 4, 2015, block 368396 was mined by P2Pool.This is notable for two reasons.The first is that the block included a transaction sent from Symbiont.io, a NYC-based startup building “middleware” that enables organizations and financial institutions to create and use ‘smart securities’ off-chain between multiple parties and have the resulting transaction hashed onto a blockchain, in this case, the Bitcoin blockchain.Several weeks later, Symbiont announced that it would begin using their “stack” to provide similar functionality on a permissioned ledger. – – which initially used Open Assets to issue a $5 million “cryptobond” onto the Bitcoin blockchain, but have subsequently switched to using a “blockchain-inspired” system designed by Peernova.

The second reason this was notable is that the block above, 368396, included at least one transaction from Symbiont which was mined by a small pool called P2Pool.Unlike other pools discussed in this paper, P2Pool is not continually operated in a specific region or city.It is decentralized in that all participants (hashers) must run their own full Bitcoin nodes which stand in contrast with pools such as F2Pool, KnC mining pool and BTCC (formerly called BTC China), where the pool operator alone runs the validating node and the labor force (hashers) simply search for a mid-state that fulfills the target difficulty.Due to this resource intensive requirement (running a full node requires more bandwidth and disk space than merely hashing itself), P2Pool is infrequently used and consequently comprises less than 1% of the current network hashrate.P2Pool’s users are effectively pseudonymous.Due to the intended pseudonymity it is also unclear where the transaction fees and proceeds of hashing go.

For instance, do the hashers comprising this pool benefit from the proceeds of illicit trade or reside in sanctioned countries or who to contact in the event there is a problem?And unlike in other pools, there is no customer service to call and find out.Bitcoin’s – and P2Pool’s – lack of terms of service was intentionally done by design (i.e., caveat emptor).And in the event of a block reversal, censored transaction or a mere mistake by end-users, as noted above there is no contract, standard operating procedure or EULA that mining pools (validators) must adhere to.This is discussed in section 3.This pseudonymous arrangement was the default method of mining in 2009 but has evolved over the years.For example, there are at least two known incidents in which a miner was contacted and returned fees upon request.Launched in late summer of 2012 and during the era of transition from GPUs and FPGA mining, ASICMiner was one of the first publicly known companies to create its own independent ASIC mining hardware.

Its team was led by “FriedCat,” a Chinese businessman, who custom designed and integrated ASIC chips called Block Eruptors, ASICMiner operated their own liquid immersion facility in Hong Kong.At its height, ASICMiner (which solo-mined similar to KnC and BitFury do today) reached over 10% of the network hashrate and its “shareholders” listed its stock on GLBSE (Global Bitcoin Stock Exchange), GLBSE is a now defunct virtual “stock market” that enabled bitcoin users to purchase, trade and acquire “shares” in a variety of listed companies.GLBSE is notable for having listed, among other projects, SatoshiDice which was later charged by the Securities and Exchange Commission (SEC) for offering unregistered securities to the public.While unregistered stock exchanges catering to cryptocurrency users and China-based mining pools may be common sights today, on August 28, 2013, a bitcoin user sent a 200 bitcoin fee that was processed by ASICMiner.Based on then-market rates, this was approximately worth $23,518.

The next day, for reasons that are unknown, ASICMiner allegedly sent the errant fee back to the original user.At the time, one theory proposed by Greg Maxwell (a Bitcoin Core developer) was that this fee was accidentally sent due to a bug with CoinJoin, a coin-mixing service.The second notable incident involved BitGo, a multisig-as-a-service startup based in Palo Alto and AntPool, a large China-based pool (which currently represents about 15% of the network hashrate) operated by Bitmain which also manufacturers Antminer hardware that can be acquired directly from the company (in contrast to many manufacturers which no longer sell to the public-at-large).On April 25, 2015 a BitGo user, due to a software glitch, accidentally sent 85 bitcoins as a mining fee to AntPool.Based on then-market rates, this was worth approximately $19,197.The glitch occurred in BitGo’s legacy recovery tool which used an older version of a library that causes a 32-bit truncation of values and results in a truncation of outputs on the recovery transaction.

To resolve this problem, the user “rtsn” spent several days publicly conversing with tech support (and the community) on Reddit.Eventually the glitch was fixed and Bitmain – to be viewed as a “good member of the community” yet defeating the purpose of a one-way-only, pseudonymous blockchain – sent the user back 85 bitcoins.On September 11, 2015 another user accidentally sent 4.6 bitcoins (worth $1,113) as a fee to a mining pool, which in this instance was AntPool.Bitmain, the parent company, once again returned the fee to the user.Do we know about other farms?HaoBTC is a newly constructed medium-sized hashing farm located in Kangding, western Sichuan, near the Eastern border with Tibet.It currently costs around 1.5 million RMB per petahash (PH) – or $242,000 – to operate per year.This includes the infrastructure and miner equipment costs.It does not include the operating costs which consists of: electricity, labor, rent and taxes (the latter two are relatively negligible).

The facility itself cost between $600,000 – $700,000 to build (slightly less than the $1 million facility BitFury built in 2014 in the Republic of Georgia) and its electrical rate of 0.2 RMB per kWh comes from a nearby hydroelectric dam which has a 25,000 kW output (and cost around $10 million to construct).In dollar terms this is equivalent to around $0.03 / kWh (during the “wet” or “summer” season).For perspective, their electric bill in August 2015 came in at 1.4 million RMB (roughly $219,000); thus electricity is by far the largest operating cost component.When all the other costs are accounted for, the average rises to approximately $0.045 per kWh.The electricity rate is slightly more expensive (0.4 RMB or $0.06) during winter due to less water from the mountains.The summer rate is roughly the same price as the Washington State-based hashing facilities which is the cheapest in the US (note: it bears mentioning that Washington State partly subsidizes hydroelectricity).At this price per joule it would cost around $105 million to reproduce “work” generated by the 450 petahash Bitcoin blockchain.

Due to a recent purchase of second-hand ASICMiner Tubes, HaoBTC currently generates just over 10 PH and they are looking to expand to 12 PH by the end of the year.The key figure that most miners are interested in is that at the current difficulty level it costs around $161 for HaoBTC’s farm to create a bitcoin, giving them a nearly 100% margin relative to the current market price.The ASIC machines they – and the rest of the industry uses – are single use; this hashing equipment cannot run Excel or Google services, or even bitcoind.Thus common comparisons with university supercomputers is not an apples-to-apples comparison as ASIC hashing cannot do general purpose computing; ASIC hashing equipment can perform just one function.There is also a second-hand market for it.For instance, hashing facilities such as HaoBTC actively look to capitalize off their unique geographical advantages by using older, used hardware.And there is a niche group of individuals, wanting to remain anonymous, that will also purchase older equipment.

Although individual buyers of new hashing equipment such as Bob, do typically have to identify themselves to some level, both Bob can also resell the hardware on the second-hand market without any documentation.Thus, some buyers wanting to buy hashing equipment anonymously can do so for a relative premium and typically through middlemen.While Bitbank’s BW mining farm and pool have been in the news recently, perhaps the most well-known live visual of mining facilities is the Motherboard story on a large Bitcoin mining farm in Dalian, Liaoning: Incidentally, while Motherboard actually looked at just one farm, the foreigner helping to translate for the film crew independently visited another farm in Inner Mongolia which during the past year Bitbank apparently acquired.Are there any other known facilities outside of China?Genesis Mining is a cloudhashing service provider that purportedly has several facilities in Iceland.According to a recent news story the company is one of the largest users of energy on the island and ignoring all the other costs of production (aside from electricity), it costs about $60 to produce a bitcoin.

However, when other costs are included (such as hardware and staffing) the margin declines to — according to the company — about 20% relative to the current bitcoin price.At the time of the story, the market price of a bitcoin was around $231.The four illustrations above are among a couple dozen farms that generate the majority of the remaining hashrate.What does this have to do with colored coins?The network was originally designed in such a way that validators (block makers) were pseudonymous and identification by outside participants was unintended and difficult to do.If users can now contact validators, known actors in scenic Sichuan, frigid Iceland or rustic Georgia, why not just use a distributed ledger system that already identifies validators from the get go?What use is proof-of-work at all?Why bother with the rhetoric and marginal costs of pseudonymity?The social pressure type of altruism noted above (e.g,.Bitmain and BitGo returning fees) actually could set a nebulous precedent: once block rewards are reduced and fees begin to represent a larger percentage of miner revenue, it will no longer be an “easy” decision to refund the user in the event there is a mistake.

If Bitmain did not send a refund, this backup wallet error would serve as a powerful warning to future users to try and not make mistakes.While there have been proposals to re-decentralize the hashing process, such as a consumer-device effort led by 21inc which amounts to creating a large corporate operated botnet, one trend that has remained constant is the continued centralization of mining (block making) itself.The motivation for centralizing block making has and continues to be about one factor: variance in payouts.Investors in hashing prefer stable payouts over less stable payouts and the best way to do that with the current Poisson process is to pool capital (much like pooling capital in capital markets to reduce risk).Whether or not these trends stay the same in the future are unknown, however it is likely that the ability to contact (or not contact) certain pools and farms will be an area of continued research.Similarly one other potential drawback of piggy backing on top of a public blockchain that could be modeled in the future is the introduction of a fat tail risk due to the boundlessness of the price of the native token.