Mining More Detailed. 3. Mining Reward Race

Introduction

Mining efficiency increase

Looking at the reward system, users sooner or later come to the conclusion that the probability to find a new block — and, thus, to gain a reward — heavily depends on hardware performance. Indeed, the greater the processing frequency is, the faster a hash calculation will be executed and the greater the chance is that a node will find a victorious option and receive the reward. Miners started looking for ways to increase the chance of finding new blocks, and as a result of this race, mining itself has passed a long way with several key transformations.

Rewarded activities

Initially mining was performed with the help of standard microprocessor resources. Since the performance of central processing units (CPU) was comparatively low, miners switched to the graphic processing units (GPU). Later on, programmable logic devices (PLD) entered the stage. So much interest in mining has not gone unnoticed by hardware manufacturers. The first Application-Specific Integrated Circuits (ASIC) were released in 2013. It is noteworthy that the evolution of mining equipment has evolved from universal flexible logic devices to specific hardwired logic devices.

Mining hardware evolution

From solo mining to farms, from farms to mining pools

Further hardware development was rather complicated. Principal withdrawal from programmable side down to microcircuitry took place. At some point, performance increase became possible only with the extensive development, which led to the creation of so-called mining farms. The main idea of such facilities is simple — many computing devices were united, like a server station. Their only task was to calculate hashes. Further mining evolution does not seem to be caused by the desire for equal reward distribution. It was more about a reliable profit, even if its amount might be lower. Miners started uniting in groups called “pools” controlled by centralized organizations.

Simplified mining rig scheme

Afterword

The peculiarities of mining reward distribution is an interesting issue as the process is constantly evolving. Apart from Proof-of-Work mining, there are many other methods of reward distribution. Moreover, some of PoW implementations are claimed to be ASIC-proof. It means that performance does not play a key role in the probability of success.

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