First, let's remember how transactions work on the Bitcoin network. Not all transfers sent by users to the network immediately deliver bitcoins to the specified wallets: in order to successfully move bitcoins to the recipient’s wallet, the transaction must be included in one of the new bitcoin blocks. The question of whether to include a particular transaction in a block is automatic mode The scripts of the pool of Bitcoin miners whose power produced this block are solved. Exodus such a decision depends on the commission assigned by the owner of bitcoins during the creation of the transaction. Until the transaction is included in the block, it will be in the so-called. mempool, a collection of all unconfirmed Bitcoin transactions.

How to avoid delays in Bitcoin transactions?

As practice shows, most Bitcoin users have encountered delays in processing sent transactions at least once. Among not very experienced Bitcoin users, there is a very noticeable misunderstanding of the root causes of such delays, and therefore there is a desire to understand this issue better. A deeper understanding of how transactions work is also useful because the processing system is similar for the vast majority of cryptocurrencies, since each of them is based on the blockchain.

The Bitcoin network is currently constantly overloaded and does not always accept transfers sent with fees equivalent to 8-10 dollars.

True, even with such commissions, confirmation by the network of your transfer can sometimes take only 15-30 minutes, but you should not count on this. Quite often, it takes an hour or several hours for the network to confirm an average paid transaction. With commissions below average, the time it takes to include a transfer in the blockchain can be 6-12 hours or more. In addition, as fees decrease, the likelihood that the transaction will freeze and will never be processed by the network increases (as a result, the user will have to wait several weeks for the automatic return of bitcoins).

To minimize the risk of such delays, all Bitcoin transfer fees must comply with the requirements current at the time of the transfer, which we will discuss below.

How to ensure fast processing of your transactions?

As already mentioned, the decision to include a specific transaction in a specific block is automatically made by the software algorithms of the mining pool that mined the block.

The size of a Bitcoin block is limited and cannot exceed 1 MB, and the size of most Bitcoin transactions is 226 bytes. Exactly what kind of transactions the pool will fill the mined block with depends on the specific commissions with which they will be provided. Specific commissions are measured in satoshis per byte, in other words, if a total commission of 113,000 satoshis is “attached” to a transaction of 226 bytes, the specific commission will be equal to:

113,000 / 226 = 500 sat/byte

Let's say the mempool contains 4,000 unconfirmed transactions with commissions from 470 to 600 sat/byte; there are almost no transfers with higher commissions, while the number of transactions with lower commissions is measured in hundreds of thousands (this is the reality of the present time). The next mined block will include the mentioned 4,000 transactions, which will occupy, for example, 960 KB of internal volume. As you can see, there is still room in the block for about 150 transactions. These transactions will be selected from a range with fees ranging from approximately 460 to 469 sat/byte, with higher fees of course given priority. All transactions with even lower fees will have to remain in the mempool for now.

Of course, this is a general and rather simplified diagram. In practice, transactions with fees of 450, 400 and even 300 sat/byte will most likely be processed by the network and included in blocks only tens of minutes or hours after sending. This is due to uneven loading of the upper part of the mempool.

Sometimes mined blocks go more often than usual, and miners willingly collect cheaper transactions in them, because the supply of expensive ones at that time was exhausted (old well-paid transactions were already included in earlier blocks, and new ones, equally attractive in terms of commission, did not have time accumulate in sufficiently large quantities).

How to assess the state of the Bitcoin network and the reasonable size of the commission?

The current state of the mempool, recommended in this moment commissions and others important parameters Bitcoin network They can suggest specialized services. So, at www.blockchain.info you can find out total load network with unconfirmed transactions, and the website https://bitcoinfees.earn.com displays in graphical and text form the number of unconfirmed transactions with a particular specific commission.

It is important to understand that data on the number of unconfirmed transactions in the network is not very informative for the user if his Bitcoin transaction has not yet been included in any of the network blocks, and thus has not reached the wallet.

After receiving necessary information A Bitcoin user can either set a maximum commission, which ensures almost guaranteed inclusion of a transfer in the next one or two blocks, or, for the purpose of reasonable savings, set a lower commission, with the probable confirmation time, which, according to service estimates, will be an hour or two.

Problems with delays in sent bitcoins can only arise when they are sent outside the cryptocurrency platform.

For the first half of January 2018, the commission of the first type can be 500 - 600 sat/byte (that is, equal to the amount of about 0.00113 - 0.00135 BTC for a typical transaction), and the commission of the second type can be at least 300 sat/byte (from 0.00070 BTC). However, these values ​​may change in the near future, so it is important to monitor their relevance yourself.

Note that in local and online wallets, scripts are also able to offer “recommended” commissions (which they calculate independently based on network analysis), but their values ​​may not be updated often enough and promptly, as the situation on the network changes qualitatively. It is important to double-check the reliability of recommendations of this kind.

Problems with insufficient commissions and possible delays in sent bitcoins can only arise when sending them outside of cryptocurrency platforms, for example, when replenishing your account with bitcoins on an exchange, selling bitcoins in an online exchanger, or withdrawing cryptocurrency from some online service, say, a crypto exchange or web wallet.

If you trade bitcoins and other cryptocurrencies directly on an exchange, or simply buy bitcoins for investment purposes, the problems described above with their movement never arise, since the movement of bitcoins occurs only between the internal accounts of exchange clients.

Conclusion

We also note that choosing the size of the commission is not always under your control.

On the one hand, when sending transactions from a number of local and some online wallets, you can set the commission amount manually; on the other hand, when sending a transfer from your balance on many other online services (for example, cryptocurrency exchanges), the commission is set by the service itself “by default." In any of these cases, the transaction is paid for by the client.

Quite often, the size of such a commission is changed by the service once every few months or even less frequently, and if additional overloads occur in the Bitcoin network, the service employees do not have technical resources at their disposal. simple way increase Bitcoin commission. Simply put, the mechanism for setting the size of commissions on services often turns out to be quite inflexible.

If you feel that a particular Bitcoin transfer is too expensive, or you are concerned that an online service is not charging enough fees for withdrawing your Bitcoins, you may want to consider using other cryptocurrencies, such as ETH or BCH, for these purposes. Altcoin transfers can cost anywhere from fractions of a dollar to several dollars. But this option is only available if your bitcoins were originally located on a cryptocurrency exchange or in an online wallet with acceptable internal cryptocurrency exchange rates.

It is best to transfer funds in dogecoins, but unfortunately not all exchanges have such a coin

This week has been a good one for Bitcoin. Amid New Year's optimism and growing confidence in the bright future of cryptocurrency following reports that practical use Bitcoin is expanding in such online industries as "" and ", the rate of the digital currency has again exceeded 1000 on leading exchanges.

As the use of Bitcoin now expands to include circles that had little exposure to it before, many new users have questions that seasoned Bitcoiners have long understood. What is Bitcoin, how to use it and what is it for? Since our surveys show that at least 20% of our readers are still unclear about the most basic concepts of cryptocurrencies, we provide answers to these and other questions below.

1. What is Bitcoin?

Bitcoin (with capital letters) is a financial network used to make payments between users. In many ways, Bitcoin is similar to traditional payment systems such as Visa or Paypal. However, Bitcoin has two important differences.

First, Bitcoin is completely decentralized. Visa and Paypal systems are owned by commercial companies that operate them for the benefit of their shareholders. No one owns or controls the Bitcoin system. It has a peer-to-peer structure in which all users are equal, and hundreds of thousands of user computers collaborate to process Bitcoin transactions, coordinating their efforts over the Internet.

Thanks to its decentralized architecture, Bitcoin became the world's first completely open financial network. To create a new financial service in the traditional banking system, you need to cooperate with existing banks and comply with many complex rules. The Bitcoin system has no such restrictions. People don't need anyone's permission or assistance to create new financial services based on Bitcoin.

The second difference that makes Bitcoin unique is that it has its own currency. Paypal and Visa process transactions in common currencies such as US dollars. Bitcoin conducts transactions in new monetary units, also called bitcoins (lower case).

2. This is very strange! Why use a payment system based on an “imaginary” currency?

Yes, it's strange. Probably everyone who encountered this idea for the first time (including me) reacted the same way: it simply cannot work. However, so far the market has refuted the fears of skeptics:

This chart shows the price movement of Bitcoin since early 2013, when the currency began to gain mainstream attention. The rate was extremely volatile, for example, it fell by 60% in April and December 2013. The same happened before, for example, after the crash in June 2011, the rate recovered for more than a year. However, throughout the 4 years of its existence, Bitcoin showed an undeniable upward trend, growing on average 10 times per year. From $0.30 at the beginning of 2011, the rate has risen to $1000 today. There are already 12 million Bitcoins in existence, so the value of Bitcoin's "money supply" is now around $12 billion.

Bitcoin has captured the imagination of venture capitalists. Bitpay, a startup that helps merchants process Bitcoin payments, has seen its capital rise by more than $2 million this year. Coinbase, a startup that helps users buy and sell bitcoin, has seen its capital rise by $25 million. And the Bitcoin startup Circle received only its first investment immediately on .

What attracts people so much? Bitcoin enthusiasts believe its peer-to-peer architecture and low barrier to entry will enable the creation of a new generation of advanced financial services, just as it has enabled the creation of new online services. Many Bitcoin fans also see it as a hedge against central banks.

3. It all looks like a bubble. Is this currency used for anything other than speculation?

I just mentioned Bitpay. The growth of this company confirms the popularity of using Bitcoin for “real” transactions. In September 2012, the company announced that more than a thousand merchants had signed up for its services to accept Bitcoin payments. Just a year later, the company announced it was serving more than 10,000 merchants. The Bitcoin payment option is also available at tens of thousands of online merchants using . For some stores, switching entirely to paying customers and suppliers in Bitcoin has saved them so much money that they can offer their customers extremely low prices. For example, an electronics and gadgets store consistently keeps the price of all electronics cheaper than on Amazon - which was previously considered simply unthinkable.

And yes, Bitcoin is also widely used in not entirely legal transactions. Programs like Satoshi Dice allow people to play gambling over the Internet (which is prohibited, say, in the USA). Until recently, he helped dealers sell millions of dollars worth of illegal substances.

Each method has its own risks. If you store bitcoins yourself, they can be lost as a result of a hacker attack, breakdown of hard disk or loss mobile device. When storing in an online wallet, you must be sure that the site owner will not deceive you or go bankrupt. The Bitcoin market is largely unregulated, so if you choose an unreliable online wallet, you likely won't be able to count on legal protection. Paper wallets eliminate the vulnerabilities of other methods, but they are not so convenient to use and, of course, the paper can simply be lost.

9. I have bitcoins and I have found a secure way to store them. What should I do with them?

Thousands of online merchants are ready to sell you any item for Bitcoin - from jewelry and electronics to illegal substances. You can pay with bitcoins in real life. To do this, you will need a mobile wallet app. The store you'll be shopping at will show you a QR code representing a Bitcoin transaction. This QR code can be scanned using mobile phone, And mobile wallet will send the required amount in bitcoins to the store address. This way your purchases will be paid for.

Of course, not all offline stores accept bitcoins yet. Earlier this year, Forbes' Kashmir Hill conducted an experiment in which she was able to live on Bitcoin for an entire week. Since she lives in the "tech capital", she was able to find enough merchants that accept Bitcoin, but with difficulty. A little later, newlyweds from the USA decided to repeat this experiment, for 3 months using only digital currency. Overall, however, Bitcoin is still far from being a practical currency for everyday use.

10. Do I need to buy Bitcoin?

Decide for yourself. You may need Bitcoins for two reasons: to pay for goods and services, or for speculation.

Bitcoin has not yet become a convenient payment technology for ordinary users. The software is too complex and due to hacker attacks, forgotten passwords, breakdowns hard drive etc. – too high. In addition, Bitcoin is now subject to extremely high volatility, so the Bitcoin in your wallet can go from $100 to $50 in one day. And at this time, the technology is not yet widespread enough to carry Bitcoin in your pocket or wallet to pay for everyday goods. For most people, traditional payment technologies such as credit cards, while they remain more convenient.

What about speculation on ? I repeat once again, this currency is not very suitable ordinary users. The security and reliability risks will be much higher if you invest thousands of dollars in Bitcoin. You don't want to risk losing thousands of dollars if you forget your password or suddenly discover that you wrote it down incorrectly. Moreover, this currency is extremely volatile. The rate can rise for a long time, and then fall by 60% in one week. In other words, you need strong nerves to invest - but many serious investors are already investing in digital currency. Of course, when investing, you need to be well thought out in order to avoid losing all your money in a frantic series of buying and selling.

11. If you don’t buy bitcoins, what’s the point of all this discussion?

Let me remind you again about . Until the 1990s, the Internet was not a practical technology that could be used ordinary people. To work with it they used complex programs With text interface and it had to be computer specialist to figure it all out.

However, no observer in 1990 would have dismissed the Internet on the grounds that it was too "abstruse" for mass use. Over time, entrepreneurs took on the basic infrastructure of the Internet and began creating innovative and user-friendly online services such as Google, Facebook and YouTube.

Bitcoin supporters believe that Bitcoin . The raw Bitcoin network is not very user-friendly, but startups like Coinbase and Bitpay are gradually improving this. The day is not far off when someone will develop a “killer app” based on Bitcoin that will offer a much more convenient financial service than regular banks. It could be an international network money transfers with low commissions, a practical micropayment system, or something that no one has even thought of yet. After all, breakthrough innovations in open network Bitcoin is available to everyone.

12. Could Bitcoins ever replace regular money?

This is, but not very likely. People want to use the currency that the majority uses, and in the United States that currency will remain the dollar for the foreseeable future. And this is a good thing: if Bitcoin becomes the standard currency of the US economy, its fixed money supply may create the risk of economic contraction and depression.

However, Bitcoin still has a huge niche to compete with traditional financial systems. Ultimately, Paypal was able to evolve because traditional financial networks did not meet all users' needs. Thanks to open architecture Bitcoin's development may become even more rapid. It's unlikely that people will ever completely abandon conventional financial systems, but there may be a significant market for Bitcoin services that are much more efficient or accessible than traditional alternatives.

May 29, 2013 at 12:48 pm

Fundamental economic problems on Bitcoin

• Payment systems

Is Bitcoin suitable as the main currency for a full-fledged economy?

In this article I will highlight a few of the obvious problems that are inherent in the nature of Bitcoin. I will also invite you to think and speculate with me about possible alternatives.

Problems

Bitcoin is deflationary in nature. The creator of the currency put this into it algorithmically when it was created. Judge for yourself: a currency has a clearly defined emission volume that strictly decreases over time. At the same time, the market is obviously growing, which means trade volumes are growing and the need for currency is growing. That is, in fact, the limited issue obviously does not satisfy the market’s need for currency. As a result, the value of the currency is growing all the time, that is, deflation is observed.

What the main problem an economy based on a deflationary currency? Stagnation. Roughly speaking, a constantly rising exchange rate encourages people not to spend money, but to accumulate it. In addition, the ability to profit from simple hoarding eliminates the need for people to produce goods and services. The result is a severe crisis of the entire economy, because society cannot live in prosperity when no one does anything.

Second important problem- This is the speculative nature of the market. When a currency is forced by its nature to continually rise, bubbles are inevitable. Classic scenario:

Bitcoin, by its deflationary nature, is doomed to constantly repeat such bubbles over and over again. For example, over the past two years one can observe two very similar bubbles: the summer of 2011 and the spring of 2013. The levels differed by 10 times, but the proportions were similar. Such bubbles are almost impossible to contain: when a currency is constantly growing, even slowly, it is of interest to speculators. I bought it cheap, waited half a year, and sold it at a high price. And the more such enthusiasts there are, the more growth is spurred. This inevitably causes the currency to grow exponentially, a bubble. With such a bubble, we observe an approximately 20-fold increase in the exchange rate, followed by a collapse. And after the collapse, the market does not die: bitcoins are actually used, for example, on the ever-growing Silk Road, and for other sales, the participants of which desire anonymity and lack of control. It turns out that this bubble pattern will inevitably repeat itself over and over again, with a certain frequency. That is, we will never wait for a stable exchange rate; it will always jump by several times and even tens of times. What kind of economy can be built in this case?

Bitcoin has had many forks that offer alternative schemes. But they are all similar in one thing - their deflationary nature. Because they are all created for speculation first of all.

What to do?

I invite everyone to think about how to build a real economy based on an anonymous, decentralized currency. An economy that will not be “fevered”, throwing it either hot or cold, due to bubbles in the main currency. Perhaps a certain replacement for Bitcoin is needed, with other emission algorithms? Or not a replacement, but an addition?

My thoughts on alternative currencies

What is the important role of the state in the country's economy? Regulation of the economy, stimulation of its growth, smoothing out crises. For this purpose, in particular, the state has a monopoly right to issue the main currency. This tool can be used to make the country prosper. But at the same time, everyone is forced to trust the right to issue to a certain narrow circle of people whom no one knows personally. With all the ensuing problems and the constant desire to redo everything in a new way (and in fact, in the old way, but with new people).

But it is possible to embed a mechanism for automatic regulation of emission algorithmically into the currency itself. In this case, the scheme can be very simple, for example: if market volumes grow, we reduce emissions; Volumes fall - we increase emissions. By analogy with the automatic regulation of mining difficulty, which allows you to more or less accurately adhere to a clearly defined emission volume. Such regulation can achieve a more or less stable value of the currency, which will allow the economy to develop much more fully.

But there is also a problem with this approach. How to introduce a currency in society whose price does not grow by leaps and bounds? Pay attention to the peaks in the growth of Bitcoin’s popularity: they happen quite clearly due to the frantic growth of the exchange rate. Let's be honest: the bulk of the people who fill the market and give it its ever-growing popularity are driven by a thirst for profit. There is a very narrow group of people who use Bitcoin for its intended purpose - for anonymous, uncontrolled money transfers. And will these people want to switch to a new unfamiliar instrument with a complex, incomprehensible emission mechanism just for the sake of the theoretical stability of its exchange rate? Big question.

I would like to hear your thoughts and suggestions on this matter. Let's think together. It is possible to build an economy, although not ideal, but much better than the current one. You just need to figure out how.

Alexander Markov

Bitcoin suffers from slow transaction processing and high transaction fees. Using the Segregated Witness algorithm can help overcome this problem, but unfortunately its adoption by the developer community is not as fast as we would like.

The Coinbase exchange announced the implementation of Segregated Witness by the end of February 2018, which should spur growth in the price of Bitcoin. And yet this is not a panacea. The Lightning Network algorithm would also come in handy.

Bitcoin remains one of the hottest topics in the press and blogs. Its incredible popularity led to the network's growing difficulties. This problem is known to many, not only those who work with virtual currency. It is actively discussed on the Internet.

If we knew that the problems of accelerating transactions would soon be resolved, we could safely make predictions about a sharp increase in the value of the world’s leading cryptocurrency.

Bitcoin network problems

Bitcoin has many problems, there is no point in listing them all. Let's focus on the main thing: transactions with this digital currency take an incredibly long time.

Many experts have no doubt that in its current state, Bitcoin will not last long on the market. Its actual practical value tends to zero; it makes no sense to use it as a means of payment or a way to accumulate money. It is useless for small transactions: commissions may exceed the purchase amount. IN retail trade it is not applicable. Anyone who has ever dealt with Bitcoin can confirm this.

The more congested the network is, the longer the wiring takes. And this problem will not be solved by itself. When a new transaction is entered into the Bitcoin blockchain, information about it is immediately visible, but the actual transfer of currency can take several minutes or even hours. This wait is inconvenient for both buyers and sellers.

Until recently, the Segregated Witness (or SegWit) algorithm was used by only 14% of suppliers, it helps speed up operations and make them cheaper. But things are about to change soon.

Coinbase takes an important step

Many cryptocurrency holders were delighted when they learned that after many months of testing and experimentation, Coinbase would finally work with the SegWit algorithm. Representatives of the largest trading platform insisted that they could not introduce such serious changes too quickly.

SegWit allows you to separate cryptographic signatures from the rest of the data on the blockchain. This results in an increase in block size. The solution appeared on the market last fall, but its implementation has so far been slow.

What are the difficulties?

The main problem lies in the fact that exchanges, publishers electronic wallets and other companies in the market should update software for working with Bitcoin. These updates lead to various complications: downtime, delays in transaction processing, and so on. It takes time to debug everything. Large sites have to do this while working with millions of clients.

That's why 10% of service providers switched to SegWit when SegWit came out, but today it's only 14%.

Coinbase is a market leader that sets the tone, it is one of the most popular exchanges virtual money. The platform’s transition to SegWit will spur the activity of other market players. This will cause Bitcoin prices to rise over time.

Why Bitcoin prices will go up

The processing speed of Bitcoin transactions will increase after the implementation of SegWit on the Coinbase exchange. The main problem with transaction processing time will be partially resolved.

But when prices rise, another problem will arise. There will again be an influx of users to all possible exchanges. And after some time the problems will return again.

This is why the concept of a facilitating network matters too. The Lightning Network promises instant transactions. If this is the case, then there will be almost no barriers left for small businesses to begin widespread adoption of payments using Bitcoin. Even if the operations are not immediate, significant acceleration will help the network develop further.

The concept of Lightning Network is different from SegWit. Essentially, this is the introduction of a smart contract system into the Bitcoin blockchain. It will greatly speed up the processing of transactions. In the facilitating network, the participants in the transaction will conduct them in an offline channel, then they will be transferred wholesale to the BTC blockchain. The developers believe that this solution will speed up the operation of the network up to the instant processing of any number of transactions. Then the main problem of Bitcoin will be a thing of the past.

Conclusion

Bitcoin is extremely inefficient when it comes to network scaling. Transactions in it become slower and more expensive as the number of users grows. The introduction of SegWit technology will solve this problem, which will lead to an increase in cryptocurrency prices. But even if 100% of companies and suppliers start using it, the speed will only double.

More long-term and promising is the Lightning Network algorithm, which will allow instant transactions. If it is successfully put into operation, then the speed problems of the Bitcoin network will become a thing of the past and will become part of the history of the virtual money market.

Volatility is not the only problem that has hit the cryptocurrency market this year. Several major problems emerged that caused increased uncertainty in the market and even negatively affected the price of some assets. Here are three cryptocurrency-related problems that simply cannot be ignored.

1. The problem with proof of concept

Blockchain is a digital distributed ledger responsible for transparently recording transactions made without the participation of intermediaries such as banks. Simply put, it is a way to transfer money and data without involving traditional banking networks.

The entire evolution of blockchain is based on the idea that the current banking system, in which it takes up to five business days to complete a transaction and banks charge large fees for intermediation, does not meet the needs of the consumer.

Blockchain eliminates these disadvantages by processing payments much faster (ideally in real time) and removing banks from the equation, resulting in significantly reduced fees.

As an idea, it sounds great, and there were many companies willing to test the blockchain in demo versions and small projects. The Enterprise Ethereum Alliance consists of over 250 organizations from around the world that are testing a version of the Ethereum blockchain with open source in various areas and conditions.

However, one issue remains unresolved: scalability for tasks real level difficulties . Although we have seen blockchain succeed in demos and various projects, no one has ever tested blockchain to solve full-scale problems of real complexity. More importantly, none of the large corporations has yet decided to completely switch to blockchain, abandoning existing networks.

Problem: Companies don't want to switch to blockchain until it can be proven to be scalable to solve real-world problems, but there is no way to prove that blockchain has scalability until some big company switches to it. Until this issue is successfully resolved, betting on blockchain will remain a risky investment.

2. The problem with regulation

Another issue that has crypto investors tearing their hair out is the issue of regulation.

Since January of this year, cryptocurrencies such as Bitcoin have been trying to put on a good face bad game, as some countries have moved to regulate digital currencies. For example, in January, South Korea announced that banks are required to verify the identity of their customers if their accounts are linked to cryptocurrency exchanges. In other words, those residents South Korea who want to purchase additional cryptocurrencies can no longer count on anonymity.

In the United States, requirements for the transparency of such transactions have also become more stringent. In November, the IRS won a lawsuit against the popular cryptocurrency exchange Coinbase, obliging it to hand over information about users who made transactions in Bitcoin worth more than $20,000 between 2013 and 2015. Since only 800-900 tax returns were filed annually during this period of time, reporting profits, it is clear that the IRS has decided to get serious about tax evaders in cryptocurrencies.

After the adoption of the tax reform law, according to which all such exchanges were closed, it became clear that the United States wants to make the situation with virtual currencies more transparent.

When cryptocurrencies first became the object of attention from investors, their main advantage was considered to be anonymity. They were perceived as the ideal libertarian currency. However, when regulators got involved, many of these currencies lost their appeal.

Problem: For cryptocurrencies to be taken seriously and have a future, some kind of regulation is needed. However, regulation undermines the core principle on which virtual currencies are based and which attracted investors in the first place. Finding a middle ground between the need for regulation and the desire for independence will be very difficult.

3. Mining problem

Finally, another serious problem is that manufacturers NVIDIA video cards and Advanced Micro Devices are obligated to make concessions to consumers at some point.

Cryptocurrency mining is one of the main processes that ensures the verification of transactions in the blockchain. It involves people or companies with powerful computers, who compete with each other to be the first to solve complex mathematical equations that serve as part of the encryption designed to protect transactions from hackers. The first person to solve these equations and confirm a set of transactions, called a block, receives the block reward. This reward is paid in tokens of the mined cryptocurrency, and this is how miners earn their living.

Not all digital currencies are designed this way, but the four largest are Bitcoin, Ethereum, Bitcoin Cash and Litecoin - are mined by miners. Mining is a very stressful process that uses a lot of electricity and requires serious equipment. For Bitcoin, for example, special ASIC miners are needed ( integrated circuits special purpose), and mining other cryptocurrencies requires GPUs.

Problem: Because of the miners, the prices of video cards have risen sharply, which has benefited NVIDIA and AMD, but angered the main buyers of video cards - gamers and businessmen. NVIDIA and AMD need to decide on their future plans: either do nothing and let supply and demand determine them pricing policy, which could lead to the loss of some of the main clients, or release special video cards for cryptocurrency mining and lose a share of the excess profits received as a result of the mining madness. It's a no-win situation for both companies.

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