Mining refers to processing cryptocurrency transactions. The mining process involves solving mathematical problems. These problems get difficult with time. As the difficulty increases the miner would need fast and reliable technology. So initially cryptocurrency was mined on the CPUs. However, its limited processing speed and high power consumption led to limited output, rendering the CPU-based mining process inefficient.
Then programmable GPUs came along, and everybody discovered they are perfect for mining cryptocurrencies so most people switched to GPUs, and the resulting difficulty increase eliminated CPU miners. In this post, we will let you know why cryptocurrency mining was done using high-end GPU’s previously and why the use of high-end GPUs for cryptocurrency mining is decreasing nowadays.
Cryptocurrency mining needs a hash function to be called repetitively, millions of times. Ideally, a computer with multiple cores can process these in parallel and complete the mining process faster.
Graphics cards use an architecture which is more suited for the parallel processing needed for image computation. A graphics processor handles an array of data in and out, with simple processing operations in between. When applied to solving the blockchain, the same elements work in parallel to perform multiple hashes simultaneously.
GPUs are faster than CPUs for the kind of repetitive math involved in mining. They solve more blocks in the same amount of time. Also, GPU mining made more economic sense than CPU mining because it’s significantly more efficient. It is this property of the GPU that made them suitable and better for cryptocurrency mining, as the mining process requires higher efficiency in performing similar kinds of repetitive computations. The mining device continuously tries to decode the different hashes repeatedly with only one digit changing in each attempt in the data that is getting hashed. A GPU fits better for such dedicated processing.
So the miners bought GPUs in a bulk amount and started to assemble their high-end powerful rigs which were capable of mining cryptocurrencies. An individual average or beginner miner kept atleast six GPUs assembled rigs for cryptocurrency mining and also there were several companies or startups regarding cryptocurrency minings where hundreds of GPUs were used in a single place after huge investment by those companies. This led to the inflation of prices of the GPUs which heavily affected the gaming industry.
Graphics cards were only a way station from personal computers to ASICs as a means to hash more quickly and solve the cryptocurrency blockchain. Now GPU has millions of cores as compared to a CPU. Hence it was the perfect solution to the compute-intensive hash problem.
Why The Use Of High-end GPU’s For Cryptocurrency Mining Is Decreasing Nowadays?
GPUs used to be important because they were capable of doing a large amount of calculation with a relatively small investment in hardware and power.
When it comes to mining cryptocurrencies, all that really matters is that the cryptocurrency you mine is worth more than what you spend on hardware and electricity. Those margins can be closer than you might think because mining cryptocurrency can be expensive. Hardware can be costly to buy up front, and some of it can cost thousands of dollars a year in electricity to run.
So when it comes to the mining hardware you choose, having more efficient systems is incredibly important. That’s where ASIC miners come in. Since they are designed from the ground up to perform the calculations required by a specific cryptographic hash algorithm used by an individual, or handful of, cryptocurrencies, they are incredibly efficient at doing so. They’re powerful, offering a high “hashrate” — and energy efficient, using far less power than a more general piece of hardware might do for the same task.
These ASICs specialized chips can hash at such high rates that no GPU would ever come close, so chances of solving a block with just GPUs are extremely small. This combination of performance and low-power usage makes them much more economical to run than more general purpose hardware. So it’s the reason why the use of high-end GPU’s for cryptocurrency mining is decreasing nowadays.
This led to the less demand of GPUs from the miners that paved way for the manufacturers or dealers to decrease GPU prices for the gamers; due to which some GPUs were seen available for purchase in this month at much lower prices compared to their prices seen two to three months ago.
Most people mining cryptocurrencies these days are using ASIC mining equipment. ASIC miners are created specifically for Bitcoin and other cryptocurrencies. These miners typically cost thousands of dollars.