If you are new to the bitcoin and cryptocurrency mining space, you may wonder; what does cryptocurrency mining look like? Today I will answer that question for you.
Cryptocurrency mining is the task of verifying online transactions and data in return for the cryptocurrency. Specialized computers “Hash” (Link to hashing) the transaction and other data, and in return they receive small bits of cryptocurrency. Hashing is done with either ASIC(Application Specific Integrated Circuit) Miners, or Graphical Processing Unit(GPU) Miners.
ASIC Miners are meant for one task and one task only, to hash on their specific hashing algorithm. GPU’s are repurposed computer graphics cards that are used to hash on a plethora of hashing algorithms. This can be done because processing graphics is, computationally, very similar to hashing.
ASIC - Application Specific Integrated Circuit
ASIC miners have not changed much over the last few years. Out of all the hashing algorithms; SHA256 has the most ASIC mining hardware developed for it. There are several other hashing algorithms that have ASIC hardware; and new ones are being developed every year. China has lead the development of specialized mining hardware, and it seems as though massive amounts of research and development are needed to develop these chips. Let alone manufacture them.
As ASIC mining hardware is always improving, the amount of cryptocurrency that each Hash makes, is reducing at the same rate. Computers like these are basically printing money, so as long as they are manufactured; they will continuously get less and less profitable. This is the plight of the crypto miner.
GPU - Graphical Processing Unit
At the beginning of each cryptocurrency’s life, it is mined by CPUs and GPUs. Solving a specific hash is similar in terms of computing, to producing graphics on a screen. One of the main benefits of GPU mining, is that the hardware has other uses. If a specific coin tanks, then there are lots of other ways to make money with the card. Plus, there are plenty of cool games to be played with a top of the line mining GPU.
GPU mining farms are much like ASIC mining farms, but the GPU’s must run a full operating system like Windows or Linux.
If you want to learn more about cryptocurrency mining check out my series on how bitcoin mining works, and a short explanation of blockchain technology. Blockchain technology can truly change the world; and it will be up to a few skilled engineers and thought leaders to build the products of tomorrow.