This article’s key focus is to explore the underlying reasons why GPUs (Graphics Processing Units) are mostly utilized in crypto mining. Crypto mining involves a lot of computational power to validate transactions and add them to the Blockchain.
However, central processing unit (CPU) mining used to be expected, but the advent of cryptocurrencies such as Bitcoin and Ethereum introduced more complex cryptographic puzzles, which necessitated specialized hardware.
They are well suited for repetitive calculations required by crypto mining due to their parallel processing ability, which they have acquired from being designed as tools for rendering complex graphics used in video games.
Miners can perform several tasks simultaneously, thus achieving high rates of hashes and better computational efficiency than CPUs.
In addition, miners can maximize profitability from mining cryptocurrency while minimizing operational expenses because GPUs consume less energy than CPUs.
As a result, these factors have led to the extensive adoption of GPUs in cryptocurrency mining operations worldwide, making them an essential component of any activity carried out within the digital money market.
What Is Cryptocurrency Mining?
In the Blockchain, cryptocurrency mining is a computational process that confirms transactions. Miners use powerful computers to solve complex mathematical problems called Proof of Work (PoW), which verify transaction legitimacy.
When miners successfully crack puzzles, they append a new block of validated transactions to the Blockchain and receive fresh digital currency coins or tokens as an incentive.
This makes it possible to ensure the security of the Blockchain and incentivize miners to contribute their computing power to the network. However, this comes at a significant cost regarding energy consumption and computation resources, which has led to debates on its environmental effect and sustainability.
How Does Cryptocurrency Mining Work?
Bitcoin is the first cryptocurrency that comes to mind when discussing cryptocurrencies. A Bitcoin miner is a financial transaction auditor who ensures that transactions on the Bitcoin blockchain are confirmed using their computing power. By avoiding double spending, miners help maintain the network’s integrity.
Since Bitcoin is purely digital, a malicious person could attempt to trick the system and double-spend money. Thus, the proof-of-work algorithm operates in blockchain technology to validate transfers.
The blockchain requires each transaction to be validated by many network nodes. These nodes are cryptocurrency miners with computers, also known as mining rigs, who verify these transactions. In this process, miners solve mathematical problems that contribute to verifying transactions, and they are rewarded with BTC for solving these problems and extending blockchain in effectively.
However, not every miner gets rewarded; only one who verifies 1MB of data and solves a mathematical problem that cracks open a new block on blockchain in will receive his pay-off. Henceforth, it would be best if you were fortunate to be among those early birds who would grab their BTC after cracking it.
Miners must increase hash rates in their computers to solve these problems first and get the correct answers faster, either by hook or crook because this indicates the solving capacity of such puzzles and finding a 64-digit hexadecimal number or hash.
Why Are Graphic Cards Used For Mining
When Bitcoin came into existence in 2009, and the first mining Blockchain used blockchain for transactions, CPU (Central Processing Unit) mining was a popular method for mining bitcoins. A simple PC processor or laptop was enough to mine BTC and reward you.
As the Bitcoin network grows, the mining reward in BTC is halved every four years, yet the currency’s market value increased to over 50,000 US dollars in 2021.
Over the years, CPU mining has become an outdated way of obtaining BTC because graphics processing units (GPUs) have surpassed central processing units (CPUs).
However, you can still mine Bitcoin with a CPU today, but it will consume vast amounts of energy. Due to the pressure exerted on the CPU by mining, your computer might fail, and you earn very little BTC, which is not profitable at all.
Modern high-end GPUs’ hash rates and processing speeds are unparalleled by CPUs, making them best suited for mining.
Thus, if you want to efficiently mine and profit from bitcoins, go for a GPU mining rig. If you’re willing to invest heavy money into mining, then go ahead and buy an ASIC miner machine (Application Specific Integrated Circuits), the most advanced type of mining computer available.
How Do GPUs Help In Cryptocurrency Mining?
Initially, cryptocurrency mining was done by CPUs or Central Processing Units; however, these had low processing power and consumed vast amounts of energy, giving out little output. Therefore, the process of CPU-based mining became uneconomical.2
The advent of GPU-based mining brought numerous advantages over CPU usage. A typical GPU such as Radeon HD 5970 would have a clock speed of executing 3,200 32-bit instructions per clock cycle, which is almost 800 times more than the frequency of a CPU that executes just four such instructions each second.3
This makes them suitable and better than GPUs in cryptocurrency mining. The mining process needs to perform similar iterative computations at higher efficiencies. The miner continuously tries to decode different hashes repeatedly over time, but only one digit changes.
In addition, Graphics Processing Units (GPUs) have also been fitted with many Arithmetic Logic Units (ALUs), which are responsible for carrying out mathematical operations utilizing data stored in registers. Courtesy of these ALUs, the GPU is capable of performing more calculations, leading to improved output for the crypto mining process.4
Evolution of Crypto Mining Hardware
In the primaeval times of cryptocurrencies such as Bitcoin, the mining process was mainly carried out using CPUs (Central Processing Units).
CPUs constitute general-purpose processors in most computers and were once enough for mining since their computing requirements were relatively low.
However, as cryptocurrencies became more popular and mining difficulties increased, CPUs became inefficient because of their restricted processing powers.
GPU (Graphics Processing Unit) mining emerged as a better alternative to CPU mining.
GPUs specialized in rendering graphics for video games are good at parallel processing tasks, making them best suited for the monotonous calculations involved in crypto mining.
Miners quickly adopted GPUs for their operations since they had much higher hash rates and computational efficiency than CPUs.
Use Cases of GPUs in Crypto Mining
Bitcoin Mining: Although Bitcoin mining has switched mainly to ASICs (Application-Specific Integrated Circuits) because of their efficient, superior nature, the early days of Bitcoin mining saw the prevalence of GPUs. These once were instrumental in securing the network, and hobbyist miners especially loved them.
Ethereum Mining: Ethereum, like many other cryptocurrencies, uses the Ethash hashing algorithm, which is memory-intensive and suitable for GPU mining. GPUs’ large memory bandwidth and parallel processing capabilities make them perfect for solving complex cryptographic puzzles needed in Ethereum mining.
Altcoin Mining: Some altcoins have GPU-friendly mining algorithms. These include coins like Litecoin (Scrypt algorithm) and Monero (CryptoNight algorithm). Miners can exploit this flexibility to switch cryptocurrencies depending on market conditions and profitability.
Mining Pools: GPUs are often used in many mining pools, where different miners come together to increase their chances of effectively mining blocks that will result in rewards. The high computational demands of mining necessitate the provision of high collective hash power by GPUs, enabling large numbers of people to mine together through individual contributions to the pool.
GPU Farms: Large-scale mining operations known as GP farms or any other related name have hundreds or thousands of GPUs deployed for cryptocurrency mining. Due to the enormous energy consumption, cooling systems and power supply units become crucial in these farms, leading to heat generation caused by GPU-based mining.
Experimental Mining: Experimental endeavours include testing new mining algorithms or venturing into alternative cryptocurrencies utilising GPUs. With these experiments, one may configure different types of Gpus and overclocking settings, among others, trying various approaches towards optimizing efficiency while seeking more profits.
