The cryptocurrency miners have used various types of mining hardware over time to mine blocks.
Depending upon the network configurations and difficulty factor, hardware used for mining may include Central Processing Unit (CPU), Graphics Processing Unit (GPU), Field Programmable Gate Array (FPGA) and Application-Specific Integrated Circuits (ASIC) devices.
Early Bitcoin client versions allowed users to use their CPUs to mine.
The advent of GPU mining made CPU mining financially unwise as the hash rate of the network grew to such a degree that the amount of bitcoins produced by CPU mining became lower than the cost of power to operate a CPU.
The option was therefore removed from the core Bitcoin client's user interface.
CPU miners are now locked out of the Bitcoin mining ecosystem, but there are still many coins that can be mined via CPU alone.
There are a number of factors that should be considered before CPU mining any coin, such as mining difficulty, price volatility, market capitalization, use cases, and developer background, but the blockchain ecosystem is home to hundreds of promising projects that rely on the efforts of exploratory, forward-leaning miners.
GPU Mining is drastically faster and more efficient than CPU mining.
A single GPU today is roughly equal to 30 CPUs. A standard GPU, like Radeon HD 5970, clocked processing speeds of executing 3200 32-bit instructions per clock, which was 800 times more than the speed of CPU that executed only 4 32-bit instructions per clock.
The core reason behind this efficiency is that the video processing GPUs are devised to do better in performing similar and repetitive work, than in performing diversified multi-tasking functions like those of the CPU.
For example, rendering a 3D movie requires the GPU to keep processing similar kinds of information to the screen again and again, though with slight changes.
It is this property of the GPU that makes 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.
Despite technological advancements, certain challenges like excessive power consumption and limited profit potential remain which mar the efficiency of the mining hardware.
GPUs have been around for years, but are now facing competition from improved, new-age devices.
They include the Field Programmable Gate Arrays (FPGAs) and the Application Specific Integrated Circuits (ASICs), which score better than both CPUs and GPUs at performing hash calculations, an essential function to blockchain management in cryptocurrency.
Fig: GPU Mining Rig
FPGA Mining
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining.
FPGAs typically consume very small amount of power with relatively high hash ratings, making them more viable and efficient than GPU mining.
FPGAs are designed to consume less power than other integrated circuits, making mining a very profitable venture, especially in countries such as Sweden where electricity prices are lower. In addition to low power consumption, higher levels of customization when compared to commercial off-the-shelf (COTS) hardware mean FPGAs can be configured to compute different algorithms specific to different cryptocurrencies, thereby allowing miners to switch from mining one type of currency to mining a different type, depending on profitability ratios, with very little downtime.
In comparison to GPUs, FPGAs are better because they deliver ten times the hash rate of a GPU at a fraction of the electricity cost.
In comparison to ASICs, FPGAs are better because they offer flexibility.
Unlike ASICs, FPGAs can be adjusted post fork.
This means once you buy an FPGA card you can reconfigure it as needed to mine whichever coin is the most profitable.
Fig: FPGA Mining Rig
The main reason why FPGA isn’t the dominating mining equipment is its high price.
With about $4K per card, or $25-30K per rig, this isn’t the equipment most miners will buy.
While it’s true FPGA cards repay themselves much faster than GPUs, this is still a huge amount of money for most miners, especially when you consider the volatility of the crypto market.
In addition to their high prices, FPGAs are still behind ASICs in terms of electricity consumption.
While this isn’t a big deal for miners in areas with cheap electricity, for many others it is.
One more reason FPGA cards are not mainstream is that they require in-depth technical knowledge to configure.
There has been a lot of development in the area of simplifying the use of FPGA cards, but it’s still far from a just-plug-and-run situation.
An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose.
ASICs were the next step of development after CPUs, GPUs and FPGAs.
ASICs designed for Bitcoin mining were first released in 2013.
For the amount of power, they consume, they are vastly faster than all previous technologies and already have made GPU mining financially.
Capable of easily outperforming the aforementioned platforms for Bitcoin mining in both speed and efficiency, all Bitcoin mining hardware that is practical in use will make use of one or more Bitcoin (SHA256d) ASICs.
ASIC miners have the highest hash rates for any coin they were specifically built to mine.
ASIC miners use a lot less electricity when compared to both CPU and GPU miners.
Fig: ASIC Mining Rig
There are certain drawbacks of using ASICs as a mining hardware.
ASIC miners have a much shorter profitable lifespan as new versions are continually being pushed out.
As soon as an updated version hits the market, all previous models become obsolete.
Unlike a GPU rig, an ASIC miner cannot be upgraded and will be forever limited to its original specifications.