On January 3, 2009, Satoshi Nakamoto mined the Genesis Block on a small server in Helsinki, Finland, and received a reward of 50 bitcoins, which marks the beginning of crypto mining.
From CPU to ASIC
In Satoshi Nakamoto’s initial vision, BTC mining could be performed using CPUs installed on PCs. During its infancy, Bitcoin remained obscure and offered no value.
It wasn’t until 2010 when Bitcoin enthusiast Laszlo Hanyecz argued that GPUs could perform more computations per second than CPUs and tried to use GPUs for mining, and he was correct. After Hanyecz shared his GPU mining code with the community, Bitcoin saw its first hashrate surge by 20,000 times, from 6 MH/s in January 2010 to 120 GH/s in December 2010.
What’s interesting is that Hanyecz, who introduced GPU mining, was also the one who started Bitcoin Pizza Day. Hanyecz earned plenty of bitcoins through the GPU mining approach he invented and spared no efforts to promote the crypto. For instance, the guy bought two pizzas with 10,000 BTC, giving real value to the new currency for the first time.
The appearance of GPU mining and the surging BTC price led to a mining arms race, and miners were constantly seeking new ways to improve their hashrate. In 2011, someone shared the code of FPGA mining machines on GitHub, which started a new era dominated by specialized mining rigs. In 2011, the Bitcoin hashrate rose from 116 GH/s at the beginning of the year to nearly 30 TH/s at the end of the year, a nearly 300X growth.
2012 saw the birth of ASIC mining machines, which are superior models, and the Bitcoin hashrate skyrocketed from 20 TH/s to 12 PH/s, an increase of 600 times. Since then, ASIC models have replaced CPUs, GPUs, and FPGA machines as the mainstream BTC mining machine.
From Solo Mining to Pool Mining
The growing hashrate raised new concerns — Is bitcoin mining still profitable as more and more miners join the business? Upon realizing the limitations of solo mining, Czech programmer Marek Palatinus found a solution: unite BTC miners, pool the resources, and share the profits. In 2010, Marek started slushpool, the world’s first mining pool. Since then, BTC mining has gradually transitioned from solo mining to pool mining.
Although mining pools gather a large number of miners, miners are not always tied to one pool, which has led to the sudden rise and fall of many pools. For instance, in 2013, GHash.IO attracted…
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