THE WORLD OF CRYPTOCURRENCIES
Maximum PC|May 2021
Digital cash, mining, and a grim look at the future of graphics cards.
Jarred Walton

EVERY FEW YEARS, cryptocurrency returns to the spotlight with a surge in prices, and everyone suddenly wants to invest. This time, anyone with even a passing interest in computer hardware should know what Bitcoin is at some level, but how does it actually work, and when will we be able to buy graphics cards at reasonable prices again?

The first most people heard about Bitcoin was in 2011 when it jumped from being a weird experiment to having actual real-world value, reaching over $30 per BTC. Then it collapsed to below $2 and many were quick to call it a Ponzi scheme. Now, early 2021 has set new record highs, topping out at $58,000.

How far will it fall this time? Will the talk of investments from Elon Musk, Mastercard, and others push it to even higher highs? And why should billionaires even want to bother with cryptocurrencies? Let’s find out.

MEET THE BLOCKCHAIN

The starting point for Bitcoin and other cryptocurrencies is the blockchain. It’s become a buzzword, but the short description is pretty drab. The blockchain contains an open ledger of all transactions that have ever taken place on a given cryptocurrency network. Did you send money to Uncle Theo, paying him for a graphics card? It’s in the blockchain, for everyone to see. So, when your friend comes by claiming you never paid him back for the concert tickets, or the fast-food stop, or whatever, you can find incontrovertible proof—one way or the other.

That might sound interesting, but it probably sounds alarming, too. Why would you want everyone to be able to check on what amounts to your digital bank account? That’s where the second part of the blockchain comes into play: All transactions are at least somewhat anonymous. Unless you publicly list your Bitcoin wallet address—and it’s trivial to create more addresses, so you can have more than one—determining what money belongs to whom is difficult. It’s not impossible, especially with enough time, effort, and use of a specific wallet, but there are ways to obfuscate your transactions and keep them veiled from prying eyes.

The more important aspect of the blockchain isn’t just that it keeps a record of all transactions. The critical factor is that it’s backed by strong cryptography—SHA256, in the case of Bitcoin, and dozens of other cryptographic algorithms for other coins. A lot of complex math goes into the creation of a good cryptographic algorithm, with the end goal being that the only way to crack it would be brute force. SHA256 has a 256-bit cypher length, so breaking the encryption for a single message would involve finding the one number out of a 2256 number space that’s correct.

If that doesn’t seem like a big deal, let’s put it differently: 2256

is the same as 1.158×1077, or in other words, it’s a 1 followed by 77 zeroes. Our solar system has roughly 1.2×1056 atoms, the Milky Way galaxy has approximately 2.4×1067 atoms, and depending on whose math you want to use, the entire universe has anywhere from 1078–1082 atoms. That means a 256-bit number space is large enough that you can easily assign a unique number to every atom in the galaxy, with room to spare.

We’re simplifying quite a bit, but the main point is that cracking the cryptography behind Bitcoin would be extremely difficult, and other coins use even stronger cryptography. Bitcoin and other cryptocurrencies also use cryptography for the unique user wallet addresses. In the case of Bitcoin, there are currently a potential 2160 addresses, or around a quindecillion. No, we didn’t just make that word up. That’s a one with 48 zeroes after it. Or if you prefer, it’s 1 trillion × 1 trillion × 1 trillion × 1 trillion. We’re not likely to run out of wallet addresses anytime soon.

All of this cryptography plays a pivotal role in cryptocurrencies, as you might guess considering the name. They’re “currencies”— perhaps digital commodities would be a better name, but that ship has sailed—backed by cryptography. And when we say cryptography, what we mean is complex math, the sort of thing to make even your calculus teacher squinch up their face. So-called “fiat” currencies, such as the US dollar, are backed by trust in the government and banking institutions. Bitcoin and Ethereum are backed by our trust in math. Actually, they’re backed by math plus all of the people willing to participate in securing the cryptocurrency network, which brings us to the next topic.

SECURING THE BLOCKCHAIN

We’ve talked about cryptography, but what exactly makes this whole blockchain thing secure? Cryptocurrencies run as a large distributed network of computing resources, with the various nodes communicating with each other. Every time someone wants to move coins—or really, a portion of a coin, with most cryptocurrencies able to deal with amounts to eight decimal places—they send a transaction out on to the network and it becomes available for inclusion in the next block. Each block encapsulates all of the transactions since the previous block into one chunk, creates a digital hash signature of the block, and the entire thing gets submitted as a new addition to the blockchain.

Here’s where things get interesting. You can’t just add a new block to the network any time you want. That block needs to satisfy certain requirements. In short, you need to find a solution to a mathematical function defined by the coin algorithm. The function uses the results of the previous block as input, going back in a chain to the original genesis block. This means no one can get a head start by trying to solve for future blocks until the current block has been “solved.” The algorithms are also designed such that the solutions are effectively random, selected from the entire number space for the cryptography key. There can be a huge number of acceptable solutions, and your hardware just needs to find one of these.

When a system does find a solution, it gets to pick which transactions get included in that block (ideally, all of them, but more on that in a moment), wraps them all up with a tidy bow, calculates a digital signature, and submits that to the network. Other nodes on the network can then verify the solution and accept or reject it. Each potential solution has a timestamp, and the network has various criteria to help determine which block was found first. Eventually, the network reaches a consensus among enough nodes that things move on, so if two different people (machines) find different solutions at the same time, only one ends up as the accepted “winner.”

WHAT IS CRYPTOCURRENCY MINING?

Coin mining tends to make a lot of gamers and PC enthusiasts angry—angry or rich, depending on when they started doing it. When you hear talk of GPU shortages and mining farms, it stems from the above cryptography and securing of the networks. At their core, most cryptocurrencies depend on people joining the coin network to provide security. What they’re actually doing is donating hardware cycles to run the cryptographic algorithms to find the block solutions that keep everything flowing. But why would anyone want to do this? Answer: They get rewarded.

SAFE GPU MINING SETTINGS

Assuming you’re interested in trying out cryptocurrency mining, there’s a lot of conflicting advice on how to go about tuning for optimal performance. Many tutorials throw caution to the wind and look to maximize hash rates, with little heed to the differences in individual graphics cards. It’s a fast track to dead hardware if you’re not careful. While it’s true that AMD and Nvidia graphics cards tend to be tuned somewhat conservatively, the intent is for the card to handle hours of gaming, every day, for several years. 24/7 cryptocurrency mining is a completely different use case.

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