Bitcoin History Part 13: The First Mining Pool

The notion that anyone could solo mine bitcoin – on a CPU no less – seems positively quaint today. But in 2010, this method wasn’t just possible – it was the norm. With an exponentially lower hashrate, less competition and a 50 bitcoin block reward, there was enough pie for everyone to get a bite. But some miners didn’t just want a bite – they wanted a whole slice, and to achieve that, they decided to join forces and pool their hashpower. And thus “cooperative mining” was born.

Also read: Bitcoin History Part 12: When No One Wanted Your BTC

Bitcoin’s Pool Birth

If Bitcoin is a revolution, it is one which contains a series of micro-revolutions. In late 2010, Bitcoin was to experience its first industrial revolution when a few miners agreed to combine their hashing power. In that moment, history was made, and in the years to come, so was a lot of money. Not everyone was enamored with the idea, though, when it was first floated by Slush on November 27, 2010. “Once people started to use GPU enabled computers for mining, mining became very hard for other people,” he explained. “I’m on bitcoin for few weeks and didn’t find block yet (I’m mining on three CPUs). When many people have slow CPUs and they mining separately, each of them compete among themselves AND against rich GPU bastards ;-).” He continued:

I have an idea: Join poor CPU miners to one cluster and increase their chance to find a block!

Slush added: “Advantages? When you have poor standalone computer, you need to wait many weeks or even months for finding full 50BTC reward. When you join cluster like this, you will constantly receive small amount of bitcoins every day or week (depends on full cluster performance) … I think it is extremely important for bitcoin economy to diversify mining across whole network and not leave mining on few lucky guys with fast GPUs.”

Bitcoin History Part 13: The First Mining Pool

Skeptics Were Skeptical But the Believers Believed

Reaction to Slush’s bold proposal was mixed. Some bought into the idea, while others were distinctly unimpressed. “Isn’t cooperative mining a form of communism?” responded one Bitcointalk user. “I think it’s useless and much harder to do than one might think.” “This is fundamentally flawed,” snapped another pooled mining opponent.

Slush remained undaunted, though, and within three weeks of his proposal, “cooperative mining,” as it was then known, began. Slush Pool was compatible with Jeff Garzik’s bitcoin CPU miner at launch as well as a couple of early GPU miners. “There is already ~600000khash/s [600 MH/s] of power and more will come tomorrow,” proclaimed Slush. He wasn’t wrong.

Bitcoin History Part 13: The First Mining Pool

Today, Slush’s cooperative mining Bitcointalk thread has grown to 1,148 pages, and Slush Pool, which currently captures 9.3% of the BTC network hashrate, has also grown spectacularly. Since 2010, it’s mined over 1 million BTC and now boasts 8,500 miners and a hash rate of more than 5 EH/s – an increase of 8.4 billion X in nine years.

Bitcoin History Part 13: The First Mining Pool

Bitcoin History is a multipart series from news.Bitcoin.com charting pivotal moments in the evolution of the world’s first and finest cryptocurrency. Read part 12 here.


Images courtesy of Shutterstock and Blockchain.com


Did you know you can earn BTC and BCH through Bitcoin Mining? If you already own hardware, connect it to our powerful Bitcoin mining pool. If not, you can easily get started through one of our flexible Bitcoin cloud mining contracts.

Tags in this story
Kai Sedgwick

Kai’s been playing with words for a living since 2009 and bought his first bitcoin at $19. It’s long gone. He’s previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

After Trillions Printed Under QE, Politicians Now Say Deficits Don’t Matter

When quantitative easing (QE) was introduced, it was likened to a drug, with central banks making an emergency injection of money to resuscitate the global economy. Now it seems that some politicians have gotten addicted to this drug, going as far as to claim that government deficits don’t matter and the money printing can just continue unabated.

Also Read: Why Cryptocurrency Investors Are Renouncing Their US Citizenship

Central Banks Create Trillions Out of Thin Air With QE

In the wake of the 2008 global financial crisis, central banks embarked on a gargantuan QE policy, expanding their balance sheets by many billions of dollars worth of government bonds and other financial assets each month. Now, more than a decade on, this policy is considered to be largely over but major central banks still hold trillions on the books. As of the end of April 2019, the U.S. Federal Reserve’s balance sheet stood at $3.89 trillion, the European Central Bank’s balance sheet was $5.3 trillion and the Bank of Japan’s balance sheet was $5.1 trillion. These figures are respectively comparable to 18.5% of the GDP of the U.S., 40.3% of the GDP of the eurozone and 102.2% of the GDP of Japan.

This is after central banks were unwinding, or tapering the process, in 2018, with the ECB for example dropping from a high of €80 billion per month in asset purchases to just €30 billion each month from January to September 2018. This further declined to €15 billion a month from October to December 2018, for a total of about $452 billion in 2018.

As if the central banks’ massive balance sheets were not enough cause for concern for the public whose wealth they endanger, some politicians are also now claiming that government deficits don’t matter. Under the newly touted Modern Monetary Theory (MMT), actions to counter deficits such as cutting spending or raising taxes are only needed when inflation is out of control. Two obvious problems with this reasoning are that first, it is like saying that jumping out the window is not dangerous until you hit the ground, and second, that governments can simply lie about inflation being low.

If politicians tell people that deficits don’t matter and we shouldn’t try to balance the books now, how will they be able to convince the public of the need for harsh measures when inflation bites to prevent it becoming unsustainable and spiraling into hyper-inflationary territory? In many countries, when the government or central bank refers to inflation, they only factor in some consumer goods and services, thus overlooking assets bubbles developing in fields such as stocks and real estate. In fact, for most people, buying a house is the biggest purchase of their lives so ignoring real estate when calculating inflation makes it irrelevant as a measure for the burden on the average person. This has already caused the emergence of a generation of young people who can’t buy a home in many developed markets around the world while inflation has officially been flat for years.

After Trillions Printed Under QE, Politicians Now Say Deficits Don’t Matter

Modern Monetary Theory 101

Modern Monetary Theory takes the concept of fiat money to a logical extreme, describing currency as a public monopoly which the government is a price setter of and claiming that anything less than full unemployment is evidence that it is over-restricting the supply and needs to print more. Most leading economists reject the claims of MMT, including New Keynesian economists. Even Paul Krugman came out against it in 2011, admitting he wished he could agree with the theory but that “it’s just not right” and demonstrated how it can lead to hyperinflation. However, for politicians who wish to avoid taking unpopular austerity measures, the idea that governments should not worry about deficits because they can always print more money is just too seductive to pass up.

After Trillions Printed Under QE, Politicians Now Say Deficits Don’t Matter

The place where MMT is most heatedly debated right now is Japan, where, as noted above, the central bank’s balance sheet is already worth more than 100% on the country’s whole GDP due to QE. A strange mix of politicians, starting from the conservative side and stretching all the way to the Japanese Communist Party, are using the theory to justify their opposition to a sales tax hike needed to prevent a government deficit. The Japanese Finance Minister called this “extremely dangerous” and warned against Japan turning into a test site for MMT.

In the U.S., the theory is mainly gaining traction with the left wing of the Democrat party. For example, Stephanie Kelton, who is a leading contributor and advocate for MMT, served as an Economic Advisor to Bernie Sanders’ 2016 presidential campaign. “There is no budget crisis in Japan,” Kelton told WSJ. “And there is no inflation problem, so why would you risk slowing consumer spending—and thus the economy—with a hike in consumption tax?”

What do you think about the claims of Modern Monetary Theory? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com.

Tags in this story
Avi Mizrahi

Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.

EVEN

Ends in 31 day(s)

65 views 

EVEN – decentralized exchange platform with high-speed functioning and advanced trading tools. It’s available for everyone, developed and supported by EVEN Foundation company.

Instructions

  1. Sign up on the website (JOIN THE AIRDROP)
  2. Confirm your email
  3. Perform KYC (Mandatory)
  4. Click On “Bounty” and complete social tasks (+500 EVEN)

Required tools

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.com

In my last article, I explained how to prove ownership of a specific address by signing a message with a public and private key pair. That’s just one way of proving ownership and verifying a valid signature, as BCH users can also anchor a document to the chain using the Bitcoin Cash protocol’s Script language. This particular walkthrough aims to teach you how to create notarized proofs using Notary.Bitcoin.com.

Also Read: Putting an End to the Bitcoin Store of Value Fallacy

Upload a File or Document to the BCH Chain and Prove Ownership Using Notary.Bitcoin.com

Proof of ownership or proof of existence is a technique that can be used by anyone via the Bitcoin Cash protocol in order to certify the integrity of a variety of proofs. Our last guide covered the basics on how a person can prove ownership of a specific BCH address and tether a unique message and digital signature to the address as well. However, there are other methods available that allow people to record various things like a document or file. The BCH chain allows you to add raw data to a transaction using an opcode called OP_Return. Our website hosts a service called Notary.Bitcoin.com that allows people to tether the hash of a signature and file within the blockchain’s recorded data. Similarly to how the private key allows someone to prove ownership of an address, a private key can also correspond with the owner’s signature and the hash of the file held in the BCH blockchain.

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.comNotary.Bitcoin.com lets anyone anchor a document hash to the BCH chain and verify the integrity of the document afterward.

This attribute allows for some unique possibilities so anyone can certify a document, contract, and date of publication at any time in a permissionless fashion. To demonstrate how to use Notary.Bitcoin.com, I decided to upload a Rich Text File (RTF) to the BCH chain which contains the abstract introduction to the Bitcoin white paper.

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.comCreating an RTF in order to upload the file hash to the BCH chain.

After creating the RTF, I simply selected ‘Choose file’ located in the Get Started section, which allows you to either upload or drag a file into the window. The file is never uploaded to the Bitcoin.com server as privacy is our top priority. After the file is uploaded, a new screen will appear which shows the document timestamp, and the document hash but the data will not be broadcasted to the BCH chain until 0.00005 BCH is paid to the address shown.

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.comIn order to add the document hash to the BCH chain, simply pay 0.00005 BCH and wait for one confirmation.

From here I fired up the Badger Wallet located in my Chrome browser and sent the 0.00005 BCH to the address supplied by Notary.Bitcoin.com. After that, the service told me that my transaction was pending and that it needs one blockchain confirmation in order to be etched into the BCH chain. After the transaction is confirmed, Notary.Bitcoin.com will provide a document hash, server timestamp, the blockchain broadcast time, and the blockchain confirmation time. The upload will also appear in the recent documents registered and the recent anchors section on the notary page.

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.comAfter the transaction is confirmed the blockchain confirmation will be timestamped and Notary.Bitcoin.com will provide a txid which can be verified on any BCH block explorer.

Notarized Proofs on the Bitcoin Cash Blockchain for Less Than 5 Cents

After you test Notary.Bitcoin.com service and get an understanding of how it works by tethering a notarized document to the BCH chain you can verify the document as well to certify the file’s integrity. Instead of selecting the Notarize tab, simply select the Verify tab and again you just upload or drag the file that was tied to the BCH chain into the window. The service will tell you whether or not the document has been notarized on the BCH chain and Notary.Bitcoin.com will redirect you to the document proof page. When the process is complete, the service also provides a transaction ID (txid) which can be queried on any BCH blockchain explorer.

Anchor a Document or File to the BCH Chain With Notary.Bitcoin.comThe Bitcoin.com Block Explorer verifying the validity of the recent document hash of the RTF.

The simplicity of tying a document to the BCH chain makes it so anyone can certify ownership and this includes businesses, journalists, whistleblowers, and artists who decide to share and create unique content. Just like our previous article which shows anyone how to prove ownership of a specific BCH address, Notary.Bitcoin.com is very easy to understand and allows anyone to prove ownership of a document or file for only 0.00005 BCH (which is less than 5 cents).

If you missed our guide called How to Prove Ownership With a Bitcoin Cash Address and Digital Signature, check it out now.

What do you think about signing and verifying an uploaded document or file with Notary.Bitcoin.com? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Notary.Bitcoin.com, Jamie Redman, and Pixabay.


Enjoy the easiest way to buy Bitcoin online with us. Download your free Bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

Tags in this story
0.00005 BCH, address, BCH, BCH Signature, bitcoin cash, Cryptography, Decryption, document, encryption, file, Hash, Message, notary, Notary.Bitcoin.com, Private Key, proofs, public key, rtf file, sign, Sign/Verify, Signature, Signature Hash, technology, Verify
Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

Utopialand

Ends in 28 day(s)

43 views 

Real estate developments are traditionally dominated by corporations or groups of people with large investment funds. We want to provide an opportunity for everyone to be able to participate in this super lucrative business. The UTOPIALAND project is unlike most of the ICO on the market right now as we are actually doing developments in the real world. The first phase of our project is to rejuvenate an existing hot spring hotel, turning it into a 5 star world class resort with high end residential villas that can be bought with our tokens. Join us in our ICO to be a part of something real.

Instructions

  1. Start the Telegram bot (JOIN THE AIRDROP)
  2. Register on the website and complete KYC (Mandatory)
  3. Join Telegram group (Mandatory)
  4. Join Telegram channel (Mandatory)
  5. Follow Twitter and retweet this tweet (Optional)
  6. Join YouTube and watch 1 video (Optional)
  7. Submit your ETH wallet address and other details to the bot

Required tools

Swissborg

Ends in 31 day(s)

25 views 

Powered by Blockchain Technology, Machine Learning, and our community’s Swarm Intelligence, our team of fintech experts and engineers are creating a holistic crypto wealth management ecosystem accessible to everyone.

Instructions

  1. Download the Swissborg App on iOS or Android (JOIN THE AIRDROP)
  2. Register and verify your phone number
  3. Use the following Referall Code: FPZTZFA (+3.000 points if you use referall code)
  4. Play and predict: earn your share of $500,000, which will be paid in Bitcoin (BTC)
  5. Complete challenges and get up to 50 CHSB Tokens for every level up (up to 1.750 CHSB)
  6. List of supported countries for this airdrop

⚡️CHSB already listed on Coinmarketcap

Required tools

Blockcart

Ends in 31 day(s)

39 views 

BlockCart is an open e-commerce enabler powered by the blockchain, where data is shared on a trustless framework, to build the ideal consumer experience.

Instructions

  1. Start the Telegram bot (JOIN THE AIRDROP)
  2. Join Telegram group
  3. Click or type /submitemail to submit your email
  4. Click or type /setwallet to submit your ETH address

Required tools

Bank of Hodlers

Ends in 31 day(s)

103 views 

Bank of Hodlers aims to provide its users with a customer-centric banking solution leveraging blockchain. They intend to treat your cryptocurrencies as a separate asset class and offer services that ensure technologies based on the blockchain are usable as of today.

Instructions

  1. Visit the registration page (JOIN THE AIRDROP)
  2. Submit your details and sign up
  3. Verify your mail and log in
  4. You will get 100 BOH tokens

Required tools

Opiria

Ends in 31 day(s)

49 views 

Opiria-Platform and PDATA Token are creating a global decentralized marketplace for the secure and transparent buying and selling of personal data.

Instructions

  1. Start the Telegram bot (JOIN THE AIRDROP)
  2. Sign-up on the BTCNEXT Exchange and submit your email to the bot
  3. Join Telegram Group
  4. Submit your details to the bot

Required tools

European Central Bank: Crypto Does Not Have Tangible Impact on Real Economy

The European Central Bank (ECB) stated that cryptocurrencies do not have implications on monetary policy or factor into the real economy in a May report.

In the report dubbed “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures,” ECB looks into the potential impact of digital currencies on economic developments and monetary policy.

The bank specifically states that such implications could occur should cryptocurrencies became a credible substitute for cash and deposits, while currently they do not fulfil the functions of money.

The bank further says that cryptocurrencies’ deployment remains limited, with a small number of merchants ready to allow purchases of goods and services with digital currency, as the prices of digital assets remain volatile.

However, the ECB notes that the development of stablecoins — the value of which is pegged to physical assets, fiat currencies, or is stabilized by an algorithm — warrants continuous monitoring because they could become less volatile if collateralized by central bank reserves.

Finally, the bank argues that “the absence of any specific institution (such as a central bank or monetary authority) protecting the value of crypto-assets hinders their use as a form of money, since their volatility: a) prevents their use as a store of value; b) discourages their use as a means of payment; and c) makes it difficult to use them as a unit of account.”

Earlier in May, ECB president Mario Draghi said that cryptocurrencies “are not significant enough in their entity that they could affect our economies in a macro way,” adding:

“Cryptocurrencies or bitcoins, or anything like that, are not really currencies — they are assets. A euro is a euro — today, tomorrow, in a month — it’s always a euro. And the ECB is behind the euro. Who is behind the cryptocurrencies? So they are very, very risky assets.”

Echoing the ECB’s stance on stablecoins, the Bank of France’s governor Francois Villeroy de Galhau said that the bank is closely watching stablecoins’ development. Villeroy made a point to distinguish stablecoins from cryptocurrency tokens at large, however, saying that stablecoins “are quite different from speculative assets like bitcoins, and more promising.”