Chip giant Intel received a patent for energy-efficient Bitcoin mining on 27 November. According to the company, this will reduce electricity costs and the size of the chips by up to 15 percent.
After Intel had already filed an application for a patent to optimize Bitcoin mining in March of this year, the company can now claim another success for itself. On November 27, the United States Patent and Trademark Office gave the chip manufacturer the go-ahead for a patent application filed in 2016. The patent details show how mining can be made more energy-efficient.
Increased efficiency by fixing cryptosoft parameters
The mining process is one of the pillars that gives Bitcoin its decentralised character and ensures consensus within the cryptosoft network. The miners solve a puzzle in a CPU-intensive process in which the SHA-256 hash of an input value must be smaller than a certain target value. ASICs, dedicated Bitcoin Mining hardware, are able to perform a large number of these hashing operations in parallel.
The patent-pending execution forms now divide the ASIC hashing process into several stages. This saves checking the hashes after each increase of the “nonce”. In this way, miners should be able to determine earlier whether an input value is suitable for the solution. According to Intel, this has the advantage that power consumption and chip size can be reduced by an estimated 15 percent.
The miners have reason to be happy
Developments such as these are particularly welcome in times when Bitcoin’s share price is comparatively low. A low price exerts great pressure on the miners as they can no longer mine profitably. According to an estimate by Mao Shixing, the operator of the Chinese mining pool F2Pool, 600,000 to 800,000 miners have ceased mining since mid-November alone.
This is understandable if one considers the estimates of real mining costs from the recently published report by CoinShares Research. According to this, the costs for mining from a Bitcoin are around 6,000 euros, based on electricity costs of 5 cents per KWh and a hardware lifetime of 18 months. This means that mining is currently only profitable under very specific conditions, such as even lower electricity prices. It is therefore to be welcomed that further chip manufacturers are entering the market and that the market for mining hardware is no longer in the hands of a few players.