Mining Industry 4.0
Tags: Bitcoin Mining, Bitcoin, Mining Industry, Blockchain, Mining

Advanced technologies have brought about a wave of remote sensing capabilities allowing airborne platforms using infrared and ultraviolet wavelengths in detecting earth minerals in a more safer, efficient manner. The shuttle radar topographic mapping (SRTM) system provides high-quality, detailed digital topographic and image data. Hyperspectral technologies are being developed to gather additional data that can be used to map the mineralogy of the ground surface. Many of these technologies are being used by space agencies in planetary exploration, such as our own Moon and Mars.

An image of mining volume measurements with satellite topography.

Mining Industry 3.0

Digital mining through the use of expensive computer hardware.

The year 2009 was the birth year of cryptocurrency mining due to the advent of Bitcoin. Bitcoin has given birth to the ideology of a decentralized form of non-sovereign currency that is out of the hands of central entities allowing corruption and inflation to be desolate. With Bitcoin, including alternative cryptocurrencies and fiat alike, the reason why it has value is because believe in its value. Since the days when the dollar was de-pegged from the gold standard, our monetary base has risen exponentially to levels that can not be sustained forever as our Debt-to-GDP ratio is now at record highs.

Bitcoin miners are essentially folks that utilize hardware to maintain the decentralized state of the network by running nodes and creating blocks full of transactions. They are then given monetary rewards, in the form of Bitcoin or other crypto, as a token of their service. Through a consensus algorithm known as Proof-of-Work, miners essentially are competing to run the SHA 256 algorithm as fast as they can to guess a number that would satisfy the target difficulty set by the network. And when I mean fast, I mean FAST. In the beginning, a CPU would be able to satisfy these requirements and be able to individually win a block reward based on the number of hashes it is able to generate per second. As time went by, more miners joined the network which increased the total number of hash rates in the network, consequentially increasing the difficult to mine so that the block creation is steady every 10 minutes.

An example of a typical GPU mining rig setup.

Naturally and based on the laws of economics, miners started using more powerful machines such as GPUs to generate hashrates in the race to win a block reward. For reference, one GPU equals to around 30 CPUs in generating hashrates. Then came the wave of FPGA mining which can reach to 100 times faster than a GPU. But setting up an FPGA mining rig was quite complex and expensive.

An example of a ASIC mining rig setup.

Then as 2013 came around, technology sprouted a new breed of miners known as ASICs (Application Specific Integrated Circuits). As dominate as they are, they are still to go to machines for bitcoin mining in 2020 because they are programmed to do one thing and one thing well, which is to run the SHA 256 algorithm trillion times a second. And new generation models coming out such as the Antminer S19 and Whatsminer M30s can generate around 100 trillion hashes per second. Let that sink in for a moment. All this has pushed up the total network’s hash rate to all time highs of around 110 exahashes per second. But ASIC mining has come with a hefty cost of consuming a lot of electricity and needing an isolated area because of physical size and household vacuum-like disturbance generating from it, about 75 decibels each (not a great thing to have in your room if you want to sleep at night). This is forced industrial and commercialized build outs of mining farms filled with thousands of mining machines joining large mining pools.

Mining Industry 4.0

Cloud mining is allowing hashrates generated to be shared amongst new users.

This has led us to the 4th wave of mining in the form of cloud computing mining. Simply put, miners are now able to rent hash rate produced from commercial operations to have a chance in mining on the bitcoin network. A lot of mining operations are out in isolated rural areas which are not very accessible to the average person. By storing their hash rates and renting it out, miners are now able to basically own hash rates that are stemming from actual mining machines. To make it easier to understand, think of it as Mining-as-a-service. A more fluid and easier transition for newcomers to get involved in supporting the bitcoin network. Large mining operations and pools have come to realize the large barrier of entry for beginner miners to get in the Bitcoin mining game, hence the influx of cloud mining platform to satisfy this opportunity.