Cryptocurrency Mining – Transition to Cloud

Abstract

Cryptocurrency, a form of digital currency that has an open anddecentralized system and uses cryptography to enhance security andcontrol the creation of new units, is touted to be the next step fromconventional monetary transactions. Many cryptocurrencies exist today,with Bitcoin being the most prominent of them. Cryptocurrencies aregenerated by mining, as a fee for validating any transaction. The rateof generating hashes, which validate any transaction, has been increasedby the use of specialized machines such as FPGAs and ASICs, runningcomplex hashing algorithms like SHA-256 and Scrypt, thereby leading tofaster generation of cryptocurrencies. This arms race forcheaper-yet-efficient machines has been on since the day the firstcryptocurrency, Bitcoin, was introduced in 2009. However, with morepeople venturing into the world of virtual currency, generating hashesfor this validation has become far more complex over the years, withminers having to invest huge sums of money on employing multiple highperformance ASICs. Thus the value of the currency obtained for finding ahash did not justify the amount of money spent on setting up themachines, the cooling facilities to overcome the enormous amount of heatthey produce and electricity required to run them. The next logical stepin this is to utilize the power of cloud computing. Miners leasing supercomputers that generate hashes at astonishing rates that have a highprobability of profits, with the same machine being leased to more thanone person on a time bound basis is a win-win situation to both theminers, as well as the cloud service providers. This paper throws lighton the nuances of cryptocurrency mining process, the traditionalmachines used for mining, their limitations, about how cloud basedmining is the logical next step and the advantage that cloud platformoffers over the traditional machines.