On exhibition is Bitmain’s Antminer S5 computer, designed for ‘mining’ bitcoin. Bitcoin are generated (or found) by powerful computers as an incentive for verifying transactions on the shared ledger, the blockchain. Networks of computers compete to verify transactions. As part of this process, they solve computational problems which have been made deliberately hard to solve in order to help maintain the value of the bitcoin by regulating the speed of their generation.
An unfortunate side-effect of the designed difficulty in mining bitcoin is that the processing of transactions is energy intensive, as the many powerful computers required to do the work consume electricity. A consideration in setting up a bitcoin mining operation is the cost of energy consumption measured against possible profit. In the case of the miner on display here, the fractions of bitcoin generated so far are outstripped by the cost of the electricity consumed. This also makes for potential environmental damage through Bitcoin’s energy consumption. For all its virtuality, bitcoin mining demonstrates the physical substrate which must support computation.
Blockchain is a proposal for a way to record financial transactions in a shared, visible accounting system that is distributed across many computers worldwide. Whereas banks and governments create and track the movement of money through the centralised trust and internationally-recognized authority they hold, blockchain proposes that strong encryption techniques for security combined with complex algorithms to record information will create a new form of distributed ledger outside the control of any single authority. The proof of this concept, proposed by its pseudonymous inventor Satoshi Nakamoto, is BitCoin, one of the first virtual currencies. The design of currencies like BitCoin is a potential challenge to the violence of centralised financial systems. However, because of the anonymity it offers, BitCoin also gained an association with violence of a different kind — the currency’s first main use (and subsequent public visibility) was for the purchase of items on the Silk Road, a dark web marketplace which sold guns, drugs, stolen information, and illegal services, amongst other less nefarious goods.
Image courtesy of BitcoinSymbol.org