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Why are GPUs so good for mining cryptocurrencies?

In the early days of crypto, people used CPUs for mining. But they soon realized that GPUs were much better than CPUs at handling 32-bit instructions, which are used when solving equations that are part of the transaction validation process. In addition, they are easy to link together and create mining devices. They are also easy to purchase and relatively inexpensive.

Today, ASIC hardware specifically designed to perform hashing functions can mine most bitcoins and some other coins. You can try to use your graphics card to mine bitcoins, but it won’t be profitable. The problem is that most cryptocurrencies handle the increase in mining agents in their blockchain networks by increasing the complexity of the equations. The more computing power there is in the network, the more powerful the mining hardware needed to remain profitable.

This is why most bitcoin miners use huge ASIC mining farms to mine tokens. The Bitcoin network is so large that you need a lot of current graphics cards to match a single ASIC device. However, GPUs are still very popular for mining ethereum because the creators of this currency make sure that their coins don’t profit from mining with ASICs.

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They do this by combining equation solving with processing large data sets that take up a lot of video memory. As a result, using ASIC hardware to mine Ether is very expensive because you have to equip these machines with a staggering amount of relatively fast video memory to keep up with their insane hash rates.

As the amount of memory needed to hold these data sets increases with the complexity of the equations, miners need to update their GPUs with new models that have more memory and are faster to keep operations profitable.

What is the future of GPU mining?

Currently, ethereum mining is very profitable, which is one of the main reasons why the GPU market is currently in a state of disarray. Miners, especially those with larger GPU farms, can afford to buy graphics cards at high prices. Secondly, they often buy cards in bulk, sometimes directly from the manufacturer. This can prevent many cards from even hitting the market. Hell, even laptops aren’t safe anymore.

In response to the outcry from people who want to play games on their PCs and aren’t prepared to pay ridiculous prices for new cards, Nvidia has decided to cripple the RTX 3060’s mining capabilities and launch a new line of GPUs for mining only. the news looks like Nvidia has decided to give gamers the option to buy new cards at relatively normal prices, at least on the surface.

If we look at the bigger picture, Nvidia may want to prevent an influx of used gaming GPUs into the market once the current crypto boom subsides. This happened in 2018, when cheap GTX 1000 series cards flooded the used market around the world. Instead of a bunch of used gaming cards that you can buy cheaply, you’ll have a lot of mining cards that have no video output and can’t convert them to play games.

But this move doesn’t mean that the GPU market will return to normal anytime soon. For starters, the new mining cards being released aren’t great performers. If they’re not competitively priced, miners will continue to buy other cards that don’t have reduced hash rates. Next, even if Nvidia reduces the mining performance of current cards through future driver updates, miners can continue to use current drivers.

In addition, it is likely that miners will be able to bypass the limitations and the RTX 3060 card will likely regain full functionality with custom drivers. Large mining operators certainly have the resources to hire engineers to write custom drivers and other software. If CMP HX mining cards are introduced at competitive prices and eventually become popular, what is stopping manufacturers from focusing on the production of mining cards? If this happens, production of gaming cards could decrease, further reducing the number of gaming GPUs available on the market.

Honestly, seeing RTX 3060 cards priced at $1,000 before their official release doesn’t give us much hope for the GPU market to normalize once CMP mining cards land. Finally, the Ether 2.0 update, which will make Ether mining obsolete, won’t be fully implemented anytime soon. Yes, while token values have recently depreciated, we are still far from the lower value of Ether mining profitability.

Therefore, the conclusion is not in favor of gamers. GPU mining seems set to remain popular for the foreseeable future. And since many gaming GPUs still have fairly respectable Ether hash rates, they will continue to take off even before they hit the shelves. So if you’re planning to buy a new gaming GPU, it can be profitable to use it for mining while it’s idle.