Cryptocurrencies is an encrypted decentralized digital currency which can transfer from one to another by the confirmation of a public ledger. The most famous cryptocurrencies must be bitcoins. First, let’s see how bitcoin works.
Bitcoins do not have gold or government-backing these numbers. It is just people believe these numbers worth something. When people transfer money to another, one’s account just goes down by a certain number and meanwhile the receiver’s account goes up by the certain number. When the transaction happens, we need to confirm the sender is the guy who own the bitcoin account. So there exists a digital signature. The digital signature is created by the true account owner and the signature is encrypted by a key which only the account owner owns. As the signature is math-based, it is unable to reuse in any other transactions. This technique ensures the security of the bitcoins transactions. During the transactions, we need a computer to work out the math problems. So there exists some public ledgers. These public ledgers are from everywhere in the world and share their computer to work out the math problem during the confirmation process. This process is known as mining and the people who own the mining machines are called miners. Miners can gain bitcoins from the system by mining.
As the value bitcoin is going up day by day. Lots of people join the family of miners. The picture in the right shows how the value of bitcoin changes vs gold. In 2017, the value of bitcoin increases rapidly compared to 2016. The tables below show how the exchange rate of bitcoins goes up in 2016 and 2017.
BITCOIN EXCHANGE RATE OF 2016
BITCOIN EXCHANGE RATE OF 2017
Due to the rapid appreciation of bitcoin exchange rate, lots of people in China purchase graphics to mine. JingDong, one of the biggest online shopping website in China, received a large number of returned graphics this summer. People took advantage of the seven day no reason to return term to mine. They bought the graphics from JingDong and then mine with it for six days. After that, they return the graphics on the seventh day. In this way, people can gain free bitcoins by repeating this procedure. As this kind of malicious purchase harms the interest of JingDong and its customer, JingDong decided to stop the support for the seven day no reason to return to the high-end graphics which are able to mine efficiently. The picture in the right shows the price change of a graphic, ASUS DUAL-GTX1060-O3G, on JingDong this year. Usually the price of a graphic continuously goes down. However, the price goes up in June and the price maintains for a month before JingDong realized it. After JingDong cancel the seven day no reason to return for graphics, the price goes down gradually. The same price change happens to almost all the graphics which are equal or have higher performance than GTX1060.