Before we can progress with these concepts, it is necessary to define briefly what cryptocurrency mining is. In very basic terms, mining refers to the process of using CPU, GPU or ASIC processing power for the purposes of hashing blocks and verifying transactions on the blockchain. This is done in exchange for a reward in the form of cryptocurrency, either for hashing a block which mints new coins, verifying a transaction to get a transaction fee or both. To explore what mining is and how it works, you can read our guides on mining.
Mining relies on computing power. That computing power comes from different kinds of hardware. CPU mining is mainly effective only on small cap coins or new PoW coins, so it is less relevant for most people out there. GPUs and ASICs are the leading hardware options for people who want to mine on bigger cap coins.
ASIC Mining: Big Cap Coins & Hashing Power
Before a person decides which coin to mine for, they must check profitability vis-à-vis the equipment they would like to deploy. Hash-rates and energy consumption/efficiency are the two main variables a miner should consider. This is because certain types of mining, such as Bitcoin mining, require a great deal of processing power, and therefore electricity, to operate, which compels miners to use specialized equipment in most cases. The need for specialized equipment introduces new variables in the decision-making process. Specialized equipment or ASICs – Application Specific Integrated Circuits – designed for cryptocurrency mining, require high power fans which make more noise than is usually suitable for an average house.
With the noise and the highly specialized computing power that an ASIC deploys, come higher electricity costs. An ASIC hashing away 24 hours a day, 7 days a week for a month, can consume the same amount of electricity as a small house does in the same period. The fact that big cap coins are often the most profitable to mine on despite high electricity consumption, due to the rise of ASIC miners in the space, makes the decision-making process more complex, since high profitability tends to decrease as more miners are encouraged to join the network and algorithms adjust mining difficulty.
This coupled with price volatility, puts decision makers in a position in which the risk of acquiring ASIC miners seems bearable at a glance, but might trap the miner in a situation in which the equipment has to be put to work to recover as much of the costs incurred in purchasing it. This is mainly due to the fact that Bitmain controls a vast majority of the ASIC miner market and increases prices when Bitcoin or other big cap coins increases. That is the point at which many miners also buy the equipment, leaving them to bite the bullet if price dips or if newer, more powerful ASICs hit the market soon after. Repurposing ASICs is not feasible, so the only other option is to point them towards chains with the same hashing algorithm once they are not profitable on a given chain.
Given that ASIC miners can only be pointed towards specific coins – an ASIC miner that is built to mine on SHA256 chains cannot be used on any other kind of chain – and considering the difficulty of making a decision regarding the timing of the purchase, GPU mining might become more attractive to some miners. GPU rigs can be pointed towards a multiplicity of chains with different algorithms, and although they are not as powerful as the ASIC miners, flexibility and an absence of a monopolizing force such as Bitmain in the GPU manufacturing industry, make them an attractive choice.
What is a GPU?
A GPU is short for ‘Graphics Processing Unit.’ As it sounds, these cards were originally created to generate and accelerate images on various electronic devices. While graphics cards are necessary even for the visual representation of any computing task, higher-quality GPUs with greater processing capacities were generally produced for the gaming industry, with more and more powerful units being produced to keep up with the ever-evolving quality of newer games.
How are GPUs Used to Mine Cryptocurrencies?
Due to their high processing capacity, miners realized that GPUs make great cryptocurrency mining tools. They are capable of hashing at higher rates than a normal CPUs, which brought about the first great leap in Bitcoin mining difficulty. GPUs are versatile; they can be used to mine on chains with different algorithm types and they are also easier to re-sell because they can be used for purposes other than mining. This gives GPUs certain advantages over ASICs.
Nevertheless, the general consensus within the gaming community is that increased GPU demand for mining purposes made gaming rigs much more expensive. The price of GPUs has skyrocketed with the advent of cryptocurrency mining. Although the prices are finally starting to decrease, much to the joy of serious gamers.
Manufacturers are aware that GPUs might be used for mining and have tried to alter their design to cater to miners. Despite the high hashing capacity of GPUs, their design cannot beat specialized ASICs in terms of sheer computing power. Therefore, miners who wish to stick with GPUs generally set up mining rigs comprising multiple GPUs for mining purposes, rather than attempting to mine with a single unit.
GPU Mining Rigs
It is also important to realize that although GPUs are far more affordable and widely available than ASIC miners, GPUs are designed to supplement existing infrastructures, and so cannot operate unless attached to an existing computer. GPU rigs also need enough RAM and SSD to function optimally. They are also more difficult to configure for mining than ASICs, as that is not what they are designed to do.
What is a GPU Mining Rig, and How Does it Work?
A GPU rig is a method of setting up and connecting multiple GPUs to increase the overall processing capacity, and therefore hashing-power on a specially-built CPU. This is done by attaching multiple GPUs to the CPU’s motherboard that should have no built-in graphics card. Enough RAM, SSD and relevant wires and a stable support-structure complete with a cooling system are also necessary to build an effective rig. Most rigs are DIY, and so require some technical know-how. There are however several YouTube videos on the subject, in addition to pre-built rigs available for purchase, such as the Shark Mini and PandaMiner B5 plus.
Is a GPU Rig Profitable?
With that said, many now say that even setting up a rig is no longer a worthwhile method to mine Bitcoin, as the electricity expenses exceed any likely Bitcoin gains. A GPU rig might still be profitable on smaller cap coins such as Dogecoin, as well as ASIC-resistant blockchains such as Monero and Bitcoin Gold.
- Non-dedicated processing power.
- Able to repurpose.
- Relatively affordable.
- Higher turnover than basic CPU.
- Requires multiple GPUs on a rig for profitability.
- Potential for long-term use due to flexibility.
- Dedicated processing power.
- Single purpose.
- Generally higher than single GPU unit.
- Minor profitability with single unit (Nicehash shows up to $62.26 p/m at current bitcoin price with Bitmain AntMiner S9).
- Length of usefulness dictated by frequency of release of new mining technology.
- Specialized, niche technology, and therefore rare.
From this summary, it would make more sense for a typical miner to stick to GPU mining rigs, unless they would prefer to specifically mine Bitcoin. However, with the continually higher difficulty incurred as more and more miners join the Bitcoin chain, a miner would likely need to invest in multiple ASIC miners for mining to be truly lucrative.
What to Look Out for When Choosing a GPU Manufacturer:
For those who prefer taking a chance on GPU mining, we have a list of hardware that can be used to build fantastic GPU rigs. These GPUs are often bought by other companies and integrated into their processing units. It is relatively simple to find out which GPUs are integrated into the gaming graphics systems, as they often include the GPU name in the title, such as the EVGA GeForce GTX 1070 Ti, which integrates Nvidia Ge-Force GTX 1070 Ti technology into its system. It is also important to realize that a single unit’s hash rate might differ from blockchain to blockchain, as well as from manufacturer to manufacturer.
For instance, the EVGA GeForce GTX 1080 Ti has a hash rate of 37 MHash/s, with an electricity usage of 190W on Ethereum, but a hash rate of 770 Hash/s, with electricity expenditures of 240W on the Equihash algorithm. The MSI GTX 1080 Ti, is worse, as it is only capable of producing 692 Hash/s at 172W, which makes the hashing much slower, with the energy consumption only slightly better, therefore actually making the hashing far more time intensive.
The operating system that the device is connected to will also affect a device’s output. For instance, the data provided above for the EVGA GeForce GTX 1080 Ti is based on the Ubuntu 17.x OS. When operating on Windows 10, the specs are 34 MHash/s, with the power consumption at 250W on Ethereum.
For the sake of expediency, the examples below will be based on hashing efficiency on the Ethereum blockchain:
EVGA Nvidia GeForce GTX 1080 Ti
Hash rate: 37 MHash/s
Electricity usage: 150W
Core Clock: 1481 MHz
OS: Ubuntu 17.x
Sapphire Radeon NITRO+ RX 580
Hash rate: 32 MHash/s
Electricity usage: 190W
Core Clock: 1370 MHz
OS: Windows 10
MSI Gaming GeForce GTX 1070 8GB
Hash rate: 31.2 MHash/s
Electricity usage: 91W
Core Clock: 152MHz
OS: Windows 10 PRO
Sapphire Radeon NITRO+ RX 480
Hash rate: 29 MHash/s
Electricity usage: 80W
Core Clock: 1150 MHz
EVGA Nvidia GeForce GTX 1060
Hash rate: 24.7 MHash/s
Electricity usage: 75W
Core Clock: >100 MHz
MSI Gaming GeForce GTX 1050 Ti
Hash rate: 15 MHash/s
Electricity usage: 65-70W
Core Clock: >100 MHz
Some Mining Examples:
SPARTAN V2 Open Air GPU Mining Rig Frame Computer Case Chassis
10 GPU slots
2 PSU slots