Learning Azure while mining cryptocurrency

One of the things that I advocate when it comes to learning new technologies is to find a use for it that interests you. Typically, that means find a problem you need to solve as I have said here:

Scratch your own itch

I used this approach to learn about Azure many years ago as I detailed here:

I finally get Azure

I continue to try all sorts of things in Office 365 and Azure but I thought I’d share this experience of using Azure to mine cryptocurrencies.

Warning, warning, spoiler alert – it isn’t profitable from what I can see to use Azure to do cryptocurrency mining. In 24 hours I managed to mine $8 and it cost me $50 in Azure credits. Not a good ROI, however what I learning during that same period was huge.

My aim was to determine how well Azure IaaS faired when it came to mining and what was the optimal family of VMs to use. I settled on using Minergate as the software to do the actual mining. Yes, there are better options when it comes to mining software but Minergate is free, is a simple install and can be set up in a few minutes. Minergate allows you to mine multiple coins, but for this experiment I stuck to just trying to mine Monero.


I then proceeded to run up various Azure VMs, install the Minergate software and complete a benchmark. I then set the machine to mining and looked at the Hashes/sec as a second data point.

You can see the results from the table above. The winner was the NC12 VM, even though it was the most expensive to run per minute.

So why do I have two entries for NC12 machines in the table above and why are the results so different? Interestingly, when you run an N series VM in Azure it doesn’t include the drivers for the GPUs. Thus, without installing the drivers you get a plain old CPU server. You’ll find the GPU drivers here:

Set up GPU drivers for N-series VMs running Windows Server

As you can see from the above table, with the GPU drivers loaded the benchmark jumps 3x fold!

Obviously, the more CPUs and GPUs you throw at crypto mining the better results you are going to get and that’s why I reckon the DS5_V2 promo machine is also a good option. The downside here is that the promo pricing won’t last forever in this machine. If the pricing goes up, then it will become less economic to mine.

All in all an interesting experiment and learning experience for me. I will continue to fiddle with crypto mining on Azure down the track and try stuff like using Linux instead of Windows as the OS and maybe look at some clustering options. However, my personal take away is that crypto mining on Azure isn’t economically viable and given that Azure rolls up costs like electricity into a single per hour cost, I don’t see how it can work economically for an individual if they use their own on premises hardware. I’m sure some people do make money mining crypto at home but, at this point, I can’t see how it can truly be profitable.


Another Azure activity I saw in action was the Security Center which flagged Minergate as malware on my VMs. I’ll now sit down and start playing with this more.

Azure, always interesting but for crypto mining not really profitable (yet!).

Understanding Blockchain

One of the reasons that I really like cryptocurrencies is that they are something built with technology and can solve some real day to day issues. Why I like them as an investment vehicle is that I understand how the fundamental underlying technology works. I would suggest that you really shouldn’t invest your money in something you don’t understand because when things go wrong you have no idea why and what actions to take.

With this in mind, I am always combing the Internet for good tutorials on how crypto currencies and the underlying technology, known as blockchain, actually work. Here are four of the best that I have currently found that will help you better understand what lies under the covers of most cryptocurrencies.


This first one is a great overview to give you an idea of blockchain and cryptocurrencies work. One of the key terms to get your mind around is a distributed ledger which this video covers well and how it works for cryptocurrency and other areas.

The next concept that is important to understand is cryptographic hash algorithms. The above video does explain this but for a much better deep dive into these take a look at this video:


The video does an excellent job of showing you in detail how a blockchain actually works.

Following on from that video, is this one by the same author:


It helps you understand the concept behind public and private cryptographic keys and how they interact with the blockchain to make it secure and private using it as signatures.

This final video is a great overview that brings all the above together:


If you watch all four videos in full I think you’ll have a much better idea of how blockchain and cryptocurrency works. Hopefully, that will make you a much more informed investor when it comes to investing in cryptocurrency going forward. However, I hope that it also makes you more aware of the major impact blockchain is going to have outside just cryptocurrencies. This was the real ‘ah ah’ moment for me when I began to fully appreciate the revolution that is going on here.

Of course, there are issues with the way that blockchain has been implemented via Bitcoin. One of these is it’s current in ability to scale as well as the dependency on ‘miners’. I’ll look at these issues in an upcoming article because they are being addressed in both an evolutionary and revolutionary way. That is, some are improving the existing Bitcoin blockchain while others are creating whole new blockchain technologies. Again, another reason I really enjoy this field, the amount of innovation that is taking place currently is amazing.

I’ll bet there are also plenty of other great explanation videos out there. If you have found one, please share it with me so I can add it my collection.

Bitcoin isn’t the only game in town

It is easy, with all the hype around, to believe that digital currency is only about Bitcoin. That however, could not be further from the truth. There are in fact hundreds of other digital currencies that fail to get main stream media focus. This is understandable given the overwhelming status Bitcoin has in the market, as well as its first mover advantage. It would however be foolish to dismiss these alternate currencies (known collectively as alt coins), now or in the future.

Although Bitcoin was the first, it is by no means the last when it comes to working in the digital currency space. Just have a look at:



1332 cryptocurrencies / 6975 markets

For a list of the most popular digital currencies and their market capitalisation. The second most common digital currency is something known as Ethereum and is in many ways very different from Bitcoin. Ethereum does not have a limited number of available coins like Bitcoin does and it is can be used in more ways than Bitcoin. Ethereum, for example, can be used to enact smart contracts on the blockchain.

To understand the basic differences between Bitcoin and Ethereum take a look at this video:

Imagine that instead of money you wanted to exchange ownership contracts on a parcel of property. The traditional method currently involved working with paper document and third parties for verification. Imagine if all of that could be replaced by a simple digital transfer of the property title, done on the public blockchain for free? All titles could then not only be easily transferred but also verified and maintained over the ages.

Think about a loyalty points system, like those offered by airlines. If you consider these as a type of currency, imagine how easily they could be implemented using the blockchain. After each trip, you’d automatically get additional frequent flyers ‘currency’ that would be recorded in the blockchain. You could then easy cash these in for rewards or use them for additional benefits. All transactions would be recorded on the blockchain and remove the need for a centralised ledger. Given that many reward programs extend the accumulation of points to other purchase, such as refuelling. Imagine immediately after paying for your fuel your rewards program is automatically credited with the appropriate amount of rewards points from the airline. No longer would you have to wait to month end to accumulate points. No longer would you have to wait till your printed rewards statement appears in the mail.

There are really so many applications for blockchain technology, currency is simply one of these. Because everything is software and typically open source, this means anyone can take the code and potentially create their own currency. At the moment, the majority of blockchain technologies are being used like currencies and typically for storing value but as acceptance increases expect to see more and more currencies appears, especially from major players.

If you wish to invest in digital currency you can do that via a wide variety of offerings. Each has different characteristics and support so you need to understand what you are investing in. There are also variations of original coins as well that implement the blockchain differently from their parent. Bitcoin itself has a number of variations (or forks) as they known. These include Bitcoin Cash, Bitcoin Gold and a rumoured Bitcoin Diamond. Each have slight technical variations in the way they implement the algorithm from the original Bitcoin.

Such variants still need the support of purchasers, merchants and miners to be successful. This is were things get interesting and to an extend why Bitcoin as the first mover has had the advantage. The reason Bitcoin cash was created for example was to reduce the transaction verification time and cost when compared to the original Bitcoin. Has it succeeded? It is certainly becoming more widely supported and many ardent supports believe it will take over the mantle of begin the ‘true’ Bitcoin.

Until then, there is going to be a lot of speculation and fluctuation in the price and that is what makes the future so exiting. What will be supported by the majority of users is yet to be determined and is probably a few years off but there is little doubt that digital currency built on the blockchain is here to stay and will fundamentally change many of our interactions. The future looks like it won’t simple be a place of single global currency as some would imagine. It will in fact be a place full of various ‘currencies’ each performing specific roles for specific demographics. Being digital means that working in this world will be far simpler than it is today and that is a good thing.

So you wanna buy Bitcoin?

A lot of people have become very interested in Bitcoin thanks to its recent run up in price. Many are also interested to dip their toe into this new world of the ‘Internet of money’. So how do you go about actually buying (and potentially selling Bitcoin)?

You are going to start out wanting to exchange your dollars for Bitcoin. This means you’ll need to take some money out of your own personal wallet and look for someone to sell you Bitcoin. You could wander the street looking for someone to sell you some Bitcoin but the chances of you finding someone are pretty slim. That means you’ll need to go to an exchange which brings buyers and sellers of commodities (in this case Bitcoin) together.

Of course all of this exchange stuff is now done electronically, so the first step is that you’ll need to sign up to a Bitcoin exchange.

There are lots of exchanges around the world that will allow you to purchase Bitcoin however my choice is:


I like them because they are local here in Australia and are part of the Australian Digital Commerce Association. You can of course choose any exchange you wish but my advice would be to do some searches for reviews on the Bitcoin exchange before you sign up. Remember, that although Bitcoin exchanges are ‘like’ normal stock exchanges in the functions they perform, they are not as regulated and consumers are not as well protected. Don’t overlook what happened at the Mt Gox exchange a few years ago. So, as with anything Bitcoin, do your homework first.

The above video will show you the process of setting up and account and buying Bitcoin via BTC markets. The process will be very similar on whatever Bitcoin exchange you choose.

When you set up an account at an exchange you’ll need to:

1. Provide proof of you identity. This can be done via submitting a utility bill that contains your details which will then be reviewed by a real person.

2. Set a login and password. Make sure that both of these are strong and that you record these somewhere safe. It is also recommended that you enable two factor authentication on your login to increase its security. Two factor simply means you’ll need to enter your password and typically a randomly generated code from an app on your phone to gain access to your account. This means if your password is ever stolen access till won’t be granted unless the code generator is also available. Again, make sure you copy everything you do here to a safe location.

You’ll next need to transfer funds into you new Bitcoin exchange account so you can buy Bitcoin on the market. There are various way to do this but some form of electronic transfer from your bank account is probably the easiest and cheapest. Also keep an eye on the cost of these transfers as they can eat into you funds, especially if you are only starting out with a small investment (which is recommended).

So now you should have a Bitcoin exchange account as well as some funds in that account. Next step, is to actually purchase Bitcoin. To do this you basically place an order on the Exchange to buy Bitcoin. You can purchase Bitcoin up to the amount of funds you have in the exchange.

There are typically two ways to order on an exchange. ‘At Market’ means you will simply purchase Bitcoin at whatever the market is willing to sell it to you for. These trades are usually executed immediately and happen at the current trading price of Bitcoin. ‘At Limit’ means you set a price at which you are willing to buy Bitcoin. Until someone is found willing to sell you Bitcoin for this amount a trade will not execute.

Thus, think of an ‘at market’ purchase as an immediate buy order and ‘at limit’ as waiting for a set price. Most people will execute ‘at market’ so they can obtain Bitcoin as soon as possible.

All things going well, the exchange will match a Bitcoin seller with your request to buy Bitcoin and the trade will be made. There will also typically be a small transaction fee associated with this trade (a commission for the exchange to facilitate the process).

Now your exchange account will have the funds you deposited withdrawn (and sent to the Bitcoin seller) and you will receive an amount of Bitcoin in return (from the Bitcoin seller). Congratulations, you are now the proud owner of Bitcoin. Welcome to the Internet of Money.

Your Bitcoin funds reside inside a digital wallet at the exchange. This wallet is provided to you generally free of charge by the exchange. It is however best practice to transfer your Bitcoin from the exchange wallet to a wallet you control.

As with Bitcoin exchanges, the range of Bitcoin wallets is vast. Again, it is important to do your research here and find a digital wallet that suits you. My choice was:




The reason I chose two is that I wanted one wallet on my desktop (Exodus) and one on my mobile devices (Airbitz). Some wallets support both environments, some don’t. At the end of the day you can have as many wallets as you wish and transfer funds between them as you see fit.

I won’t cover setting up a digital wallet here because it is generally pretty straight forward. However, what I will say is make sure you document EVERYTHING about the setup of the wallet and understand how to BACKUP and RESTORE it because once your funds are in that personal wallet you are solely responsible for the safety of that wallet. Lose access to that wallet and you lose access to your funds. So, backup, backup and backup again.

The main reason I wanted my own wallet is so that I am in full control of my funds and also that exchange wallets are a honey pot for those trying to steal money. If an exchange has lots of customers, most of whom leave their money in exchange wallet, then that is a very juicy target for hackers. Again, lessons from history see Mt Gox.

Your personal digital wallet will have a string of digits like so:


that is the transfer address you use to move you funds from the exchange wallet to your personal wallet. Make sure you get that transfer address correct because once you transfer any funds, even incorrectly, they are GONE. Remember, because this is still new technology, there are not a lot of default safety nets here. The emphasis falls on YOU to check everything. In theory, this default protection is what you pay for when you use the traditional banking system but why should you pay for that if you can do it yourself?

After a few minutes you should see that your personal digital wallet has the funds you transferred form the exchange wallet. Be patient, the transfer can take 10 or so minutes to complete.

If you wish to buy more Bitcoin you add more funds to you exchange account, go to the market and purchase more. To sell Bitcoin, you transfer from your personal wallet back to the exchange and then sell on the market.

All of this is a little technical but it is certainly getting much easier. In summary then you need to:

1. Set up an account on a Bitcoin exchange

2. Transfer funds into your exchange account

3. Buy Bitcoin on the market at the exchange

4. Transfer the Bitcoin to your own personal digital wallet (recommended)

Hopefully, that will get you started in the world of cryptocurrency. make sure you do your research when it comes to both exchanges and wallets before you proceed. I’ll go into more depth on all of these topics soon so watch out for more articles from me on Bitcoin, blockchain and cryptocurrency.

Using Bitcoin

With Bitcoin breeching the US$5,000 per coin this week it’s time to spend (get it? ‘Spend’) some time here and again dive into this new world of cryptocurrencies. In this article, I’m going to focus on the real world application of using Bitcoin but you should also check out my previous articles here:

CIAOPS now accepting Bitcoin

The history of Bitcoin

As always, there is a great video on this very topic that I have linked above. It comes CNN Inside Man. It’s done by Morgan Spurlock who brought us the thought provoking film Super-size me.

In the video Morgan sets out to only use Bitcoin for a week. This means to use it for every currency transaction for a whole week. As you’ll see, the larger the organisation he deals with, the less likely they are to accept Bitcoin. However, he does find plenty of people now accepting it and he even converts one establishment over to using it.

The reality is that trying to use Bitcoin for every transaction today is a bit like trying to use Japanese Yen here in Australia. The majority of business won’t accept it. Some won’t appreciate that Japanese Yen has value and can be exchanged for good ol’ Aussie dollars. However, the additional friction of accepting a foreign currency and then taking it somewhere to have it converted to usable local currency is enough for most businesses to reject it as an acceptable method of payment.

So it is with Bitcoin. It is simply something that is foreign to most businesses. However, at some stage so was the Internet and look how many businesses have not only adopted that but also depend on it daily for their business?

I think the similarity between Bitcoin (really the block chain technology it is built on) and the Internet is something everyone should pay attention too. We all forget how the Internet started as a bunch of geeks trying to connect computers together so they could send electronic messages to each other as well as play games. Now look what they started!

One of the upgrades I recently was able to embrace was high speed Internet here in Australia thanks to an NBN connection. The ease of which that took place compared to my very first Internet connection experience could not be starker. Today, I simply order a new connection, someone comes and wires everything up, send me a router that I simply plug in. Within minutes my Xbox is connected to the Internet and I’m playing Call of Duty II with my nine year old friends (who are all way better than me I will also add but I do have a deeper voice which makes me stand out in the crowd).

Back in the day, the amount of tech and ‘futzing’ around I’d have to do to get access to Internet was mind blowing. I had to effectively build my own TCP/IP stack manually and once I did manage to connect downloading a one MB screen saver took hours. Luckily, I’m a qualified Electrical Engineer so I eventually worked it out thanks to my slide rule, but heaven help a ‘normal’ user back the. O, how the world has changed and many forget this.

I believe we can expect the same trajectory with Bitcoin (and block chain). Many equate the world of Bitcoin today to the Internet of the early 1990’s. Based on that, what Bitcoin could grow to is scary. This is really the model you should keep in mind when it comes to the potential of Bitcoin. Many refer to it as the Internet of money.

But back to practical dilemmas for today and trying to use Bitcoin in the real world. In short you are not going to be able to pay your electricity bill using Bitcoin at the moment but there is a good chance you can pay for stuff on the Internet with Bitcoin. This process illustrates one of the major advantages of Bitcoin.

If I want to buy something I see on a foreign web site I have to ensure that they’ll firstly ship to me on this little island called Australia and secondly, I have to ensure that they’ll accept my payment. Today that payment mean using a credit card. That is a financial instrument provided to me by a bank. That means any payments I make must go through them to be transacted. That in turn means I will pay a fee for that privilege. For international transactions, that fee can be quite substantial. The other issue with such a fee is that there is a minimum charge. Thus, if I only want to purchase something for US$1 it may end up costing me as much as A$25 because of all the bank fees and minimums.

I also see the same kind of overheads if I use a non banking business to transfer money like PayPal. In fact I see it more when I accept payment from people, especially when it comes from overseas. That is a real disincentive to lose as much as 20% of a transaction just in the transfer. Who should pay that fee? As a seller do you jack up your prices to cover these fees or do you absorb that as part of staying competitive? How many local establishments do you see that now warn you of the fact you’ll need to pay additional fees if you use a credit card. Is that an incentive or disincentive? For me, a major disincentive in so many way and leads me to ask why is it so expensive to transact digitally?

Now let’s image the situation of payment using Bitcoin. If you liked this article (and I hope you do) and wanted to say ‘job well done’ by donating a dollar, all you would do is take out your smart phone, open your Bitcoin wallet app (where you Bitcoins are stored digitally). You’d then scan in the QR code on the right or below:

You’d then enter the value of $1 and send. In a short period of time I’d get notification in my Bitcoin wallet that I’d received funds. That’s it. Transaction done.

Not only is that transaction easier and cheaper but it is also faster. if you have every bought or sent money electronically why does it take a minimum of 2 days to process? For all those banking fees, why doesn’t it happen immediately? This is why Bitcoin and crypto currencies are the future of money. They remove friction from the system. They remove intermediateness who charge large fees and make small micros payments uneconomic. All of that stifles economic activity and growth. All of that creates a bottleneck that a few can use for their own benefit. All of that makes it much harder for those in non first world countries to transact and build a business.

So Bitcoin today is like the Internet 25 years ago. Few are using it and it is somewhat technical to get started BUT it’s potential is so huge that it is going to change the world in my opinion, just like what we have seen with the Internet. That means there is an opportunity to ride that comet at the early stages now. Bitcoin may look expensive now but indications are that it will only continue to grow. That means, if you are a speculator, there is potentially money to be made trading the rising value. However, if you are a business, it means that there is now a new payment system on offer that has dramatic ways of improving how payment to and from you work. In my books, if you are running any sort of business you need to be looking at Bitcoin. That’s why I’m doing it.

The easiest way to learn about Bitcoin is to start using it. I’ll cover that in detail in an upcoming article but don’t sit on the fence, just get started. That’s why I set myself up and why I have Bitcoin now as a payment method. Sure, I’d love the donation but it’s more to give people somewhere they can experiment with micro payments to better understand how it works. I’m on this journey as well and the more people learn and share the more powerful we’ll be. Look how our shared communication on the Internet have changed the world, that is what cryptocurrencies like Bitcoin are also going to do for our payment methods.

Knowledge is power and the revolution in payments is gathering momentum. Now is the time to get on board to take maximum advantage of that opportunity. Are you ready to join me? 

The history of BItcoin

I recently posted that CIAOPS was now accepting Bitcoin. The reasons behind this are to help better understand the blockchain technology on which Bitcoin is built. The best way to learn about something is to get involved, and that’s what I’ve done.

In that post I asked people to make a small bitcoin transfer to me to get things rolling. I am happy to say that I did receive one small payment, which is an indication that the underlying technology does work as expected. I’ll detail how all the transfer technology works and how to actually do it soon. If what I write here does provide you some value I’d appreciate a small donation via bitcoin. My bitcoin information appears on the right.

I am not expecting to be flooded with bitcoin transfers (although that would be nice) and the main reason for that is a lack of knowledge about what bitcoin is and how it works.


One of the places that you can start to learn more about bitcoin is to study it’s history. A great place to start this is the video Banking on Bitcoin (above). It doesn’t take you into the actual blockchain technology behind bitcoin, it looks at where the bitcoin currency came from, the main players and their involvement and how we got to where we are today.

I think that it is important here to understand that at it’s most basic bitcoin is a system of value transfer (i.e. currency) that is implemented using blockchain technology. I’ll get more into the actual blockchain technology down the track, as it is really the more interesting aspect of the story but think of blockchain as a open and distributed way to verify transactions. At the moment, most people use a credit card to transfer value. One of major differences between say a credit card and bitcoin is that all credit card transactions go through multiple agencies but are typically overseen by banks. The blockchain is effectively peer to peer with no one in the middle and done in such a way that all transactions are verified using cryptography. So extremely strong and secure cryptography takes the place of banks and intermediates when it comes to transferring value.

So bitcoin is a currency that is build on top of blockchain technology. It was one of the first to do this (now there are many) and this is why is probably has grabbed the majority of the mindset out there. Bitcoin has also been something that proves that the concept of blockchain technology does actually work. It shows that people can transfer real money between each other seamlessly.

However, as with any innovative technology, there is still a long for way to come, and many hurdles for it jump before it becomes mainstream. The documentary helps you understand this and shows you how bitcoin became linked to major crimes thanks to its involvement as a preferred payment method for the Silk Road (an illicit and obscure market place for contraband).

The financing of illegal activities has been part of humanity before bitcoin and will continue long after as well. Bitcoin was simply a method, a good method without doubt, for keeping payments secretive but this shouldn’t mean that it should be banned or even demonised. Unfortunately, today’s mainstream media did exactly this and tainted a lot of people’s concept of what bitcoin is all about. This may ultimately limit its growth but the more you understand about bitcoin the more you appreciate that much of the negative press it is receiving in the media is largely unjustified and misdirected.

Another negative challenge bitcoin has encountered over its history is the collapse of the Mt Gox exchange. You need someone to transfer bitcoin to and from dollar currency and this is the tasks of bitcoin exchanges. The Mt Gox collapse was a situation where the exchange itself either was hacked or failed due to poor business decision. It was not, as has been sensationalised a failure or vulnerability in the bitcoin and blockchain technology. However, because of its close association with bitcoin, the Mt Gox failure once again provided mainstream media an opportunity to sensationalise and misdirect people from what actually transpired.

So bitcoin has had a tumultuous history which is really worth understanding if you are at all interested in its potential. It also leaves some interesting questions unanswered. The major one is who was Satoshi Nakamoto, the creator of bitcoin? No one really knows for sure but the consensus is that was a group of people working together to give birth to the blockchain technology.

Another interesting fact is that bitcoin was released within a few weeks of the Lehman Brothers collapse, an event that accelerated the GFC. At a point at which the world had almost completely lost faith in the global banking and monetary system a potentially new a revolutionary system arose. One that was very akin to the distributed technology we see with the Internet. One that moved the control away from centralised institutions and into the control of individuals. Co-incidence?

From these early days, bitcoin has been adopted by the technology savvy who sees its potential to the point now where it is beginning to break into the mainstream consciousness and also coming onto the radar of governments and regulators.

I could go on for much longer but recommend you take a look at the documentary and form your own opinions. Let me know what you think in the comments as I’ll be posting up more information and opinions on bitcoin and blockchain as time goes along. I don’t claim to be an expert in these technologies at all, I am in the process of learning and understand the ramifications to economic and technology, so please share your thoughts and any resources you have found worthwhile as I am also doing.

Look out for more information on bitcoin and blockchain coming soon and of course, don’t forget to throw some bitcoin my way if you like what you read.