  Bitcoin is a "crypto currency", a decentralized electronic payment scheme
based on cryptography which has recently gained excessive popularity.
Scientific research on bitcoin is less abundant. A paper at Financial
Cryptography 2012 conference explains that it is a system which "uses no fancy
cryptography", and is "by no means perfect". It depends on a well-known
cryptographic standard SHA-256. In this paper we revisit the cryptographic
process which allows one to make money by producing bitcoins. We reformulate
this problem as a Constrained Input Small Output (CISO) hashing problem and
reduce the problem to a pure block cipher problem. We estimate the speed of
this process and we show that the cost of this process is less than it seems
and it depends on a certain cryptographic constant which we estimated to be at
most 1.86. These optimizations enable bitcoin miners to save tens of millions
of dollars per year in electricity bills. Miners who set up mining operations
face many economic incertitudes such as high volatility. In this paper we point
out that there are fundamental incertitudes which depend very strongly on the
bitcoin specification. The energy efficiency of bitcoin miners have already
been improved by a factor of about 10,000, and we claim that further
improvements are inevitable. Better technology is bound to be invented, would
it be quantum miners. More importantly, the specification is likely to change.
A major change have been proposed in May 2013 at Bitcoin conference in San
Diego by Dan Kaminsky. However, any sort of change could be flatly rejected by
the community which have heavily invested in mining with the current
technology. Another question is the reward halving scheme in bitcoin. The
current bitcoin specification mandates a strong 4-year cyclic property. We find
this property totally unreasonable and harmful and explain why and how it needs
to be changed.
