What are the differences between ASIC and GPU crypto mining? A natural question that may come to your mind, whether you are an established crypto miner or are just starting out is whether you should use GPU or Graphics Processing Unit or an ASIC or Application Specific Integrated Circuit for your mining purposes.
This article will break it down for you with the differences between the two approaches.
With the ever-growing popularity of the cryptocurrencies, crypto mining has also become a familiar term. A lot of hobbyists and crypto enthusiasts are making a huge amount of money already by mining high performing crypto coins.
However, most of the crypto miners still face a dilemma while choosing between an ASIC and a GPU for their mining needs.
The cost and Return on Investments are the primary parameters to determine which among ASIC and GPU mining is best suited for you.
However, knowing all the differences between them will help you a great deal to make the right choice. Check out Differences Between USDT and USD.
Since the final choice is yours, you must consider the pros and cons, your situation, the electricity cost, location, your familiarity with computers, your skill level, your budget, and the type of coin you want to mine.
5 Differences Between ASIC and GPU Crypto Mining
Graphics Processing Unit, or GPU mining, may not be potentially as powerful as ASIC mining, but it does offer a lot of flexibility in its application and can mine multiple crypto coins.
It is easily available and can do repetitive calculations. A GPU mining rig that comes with a set of GPUs in a computer setup can also provide more hash power with more GPUs.
ASICs, on the other hand, are not available readily and will not offer such benefits. There are also several other factors that make these two options significantly different, though it cannot be concluded that one is better than the other.
Therefore, it is important that you know much more than the basic differences between these two coin mining options which is the sole intention of this article.
1. Value Proposition
The ASICs are more profitable to use, in spite of their high initial cost of investment. This is because these machines offer more value propositions which is quite understandable due to their straightforward and purpose-built design.
It is custom designed to do one thing and one thing only, which is to mine crypto coins fast. Nothing, not even the GPUs, can compete with the ASICs in that aspect.
On the other hand, in comparison, the GPUs are designed to calculate anything using a processor that is meant for general purposes. This means that a GPU is ALSO good for crypto coin mining but not for it alone. Therefore, the value proposition of the GPUs is significantly less in comparison to the ASICs.
2. Hash Power
In terms of hash rate, the ASICs are more powerful without any doubt but the fact is that you are not mining hashes but crypto coins. Therefore, this distinction is incredibly important and needs to be better understood.
The speed of the ASIC will directly determine how many crypto coins it can mint but this machine is typically not a printing press for crypto. Therefore, it does not help in how crypto works. Ideally, the number of new crypto coins generated is fixed with each block.
For example, for Bitcoin, it is just 6.25 new coins every ten minutes. It cannot be more or less. This means that your share of the reward is not directly proportional to the hash rate but it is a fraction of the total hash rate of the network.
Therefore, the hash rate factor is out of the equation since you have the same ASIC as others and are on a level playing field. Therefore, if power is not the factor for how many coins you earn, then the number of ASICs you have is.
In comparison, the GPUs can surely beat the ASICs in this matter. However, it should be kept in mind at this point that the GPUs are not meant for mining crypto coins only but for other purposes as well.
In spite of this fact, there are only a handful of companies that are into ASIC mining and making profits. In comparison, you will find thousands of small and big companies making handsome profits from GPU mining, which proves it is not only about hash power.
For example, an older model of Bitmain S9 can barely produce a net profitability of less than $1.50 on 1600 W, which has increased from $1 after the significant drop in the hash rate due to China banning crypto mining.
In comparison, even the outdated GPUs such as the RX 470 4 GB can net in excess of $2 per day on 125 W and cost just $200. This is in spite of the fact that the 4 GB GPUs cannot mine Ethereum any longer.
Apparently, the ASICs seem to be more efficient. However, statistically speaking, most of the ASICs will draw nearly 800 watts of electricity to operate. This amount is the same irrespective of the fact that you are using an older ASIC or a new ASIC.
This means that, even after upgrading your old ASIC to a more efficient one, your electricity bill will not go down. This also means that your machine is using the same watts as others are since everyone is using the same ASICs as you are.
This means that all of you will end up in the same place using the same amount of energy to gain the same comparative slice of profits. Therefore, in such a situation, the only real winner is the company that builds the ASICs.
As for the GPUs, if you compare them with ASICs on a dollar-for-dollar basis, these are more efficient, and that is what matters most. A couple of years back you could mine Ethereum worth $1 a day by burning only 100 W with a GPU after electricity.
On the other hand, for the same worth of Bitcoin a day you would require more than 800 W by using an ASIC, after electricity. Over time, technologies have become more sophisticated and the numbers have grown significantly but the difference still stands.
In 2021, you can use a Bitmain s19j to mine nearly $32 worth of Bitcoin with a total consumption of 3000 watts of energy but you can mine a net worth of $92 Ethereum with 3000 watts of the latest GPUs such as the 23 RX 5700. Therefore, in terms of dollars and efficiency ASICs are not even close to the GPUs.
4. Ease in Use
Without any argument, it can be said that the ASICs are very easy to use since it does not need an expert to set it up. However, this is against the cardinal rule of crypto mining which is profitability is inversely proportional to the ease in mining always.
Since crypto mining is considered to be a competition, if there is no entry barrier or difficulty in use, success will be assured all the time for all miners and therefore everyone participating in it will be a winner.
However, the fact is, no one apart from the ASIC company is a winner. Therefore, ease of use in this case is a negative rather than a positive aspect.
GPUs, on the other hand, are far harder to mine with, though you need not be a Ph.D. to put things together. You can say it is far more challenging in comparison to mining crypto coins with an ASIC.
However, at multiple levels, your profits can be lowered, especially if you take the easy route to build the same rig as the others are and mining the same type of crypto coins as them. This is far from perfect though it is better than the ASIC mining since you will make profits over time.
However, if the going gets tougher, you may find it very hard to stay afloat. In such situations, you can enhance your chances of making more profits with GPU mining if you mine those coins that others are not.
5. A Few Technological Differences
Here are a few smaller and more evident technical differences between GPU mining and ASIC mining for your knowledge.
In the GPU mining process, it is the graphics card of the computer that solves the complex mathematical problems and algorithms but in ASIC mining it is the chip that is responsible for this job.
Another basic and obvious difference between GPU mining and ASIC mining is that GPU mining is quite fast but ASIC mining is much faster due to the powerful hardware that these machines come with.
The ASIC chips can even solve the SHA256 algorithm much faster than the GPUs. This has made the ASICs more efficient since these are algorithm and coin specific devices.
In comparison, the GPUs are much more flexible than the Application Specific Integrated Circuits. This means that with the ASICs you will have a very narrow set of functions.
The ASICs are more expensive when you consider the allied expenses than a GPU miner and these are also not easily available in the market. Therefore, if you are not into large scale mining, spending such a huge amount of money on single hash power may be unwise.
An ASIC is highly powerful and therefore it will use a lot of energy. This will raise your electricity bill more than a GPU. However, the latest ASIC miners consume much less energy and have an increased hash rate as well but that, once again, will come with a lot of high allied costs.
When it comes to the lifespan, the ASICs tend to have a much shorter lifespan in comparison to the GPU miners. And most importantly, if there is any change made in the hashing algorithm for a specific coin, it will make the machine obsolete overnight!
Most of the ASICs are affordable and easy to use since these are mainly Plug and Play devices that come with a pre-built setup. You will have very little or no issues at the onset, which cannot be said for the GPU miners with emphasis.
The ASICs do not have any resale value. Once these machines become obsolete, they are trash. Moreover, these machines come with a warranty for a very short period, typically ranging for a few months only.
In comparison, the GPUs usually come with a warranty of 2 years at least, if not more, and also have some resale value, thanks to its flexibility in usage.
Though the ASICs can perform trillions of hashes per second, with it comes a significant downside: extreme heat. This means that your ASIC will need excellent and consistent cooling. This will not only add to the cost but the fans will also make a lot of noise as compared to a GPU miner.
When it comes to configurations, the GPUs are quite complicated for that matter in comparison to the ASICs that are custom built. It cannot perform on its own.
You will need to put together a fully serviceable and well designed computer for that matter before you can start mining.
You will need different components to assemble such as a CPU case, RAM, a motherboard, SSD, and wiring. All these need to be purchased separately which may add to the overall cost of your mining process.
If you use a GPU to mine crypto coins, you will typically need a much larger space to work on and set up all the components of the computer.
On the other hand, the ASICs do not need a larger space being small in size. These machines also do not need as much maintenance as a GPU, but, as said earlier, mind the noise.
Which is Better – ASIC or GPU Crypto Mining?
Ideally, neither one is better than the other. It all depends on the specific type of coin you are mining and the algorithm in question.
For example, mining Bitcoin will essentially need an ASIC for having a respectable ROI but other coins may not because the difficulty level is quite high.
On the other hand, Ethereum is essentially ASIC resistant and therefore it is good to mine these coins with normal GPUs. This is because ASICs do not even exist for the Ethereum algorithm.
To start with, it is good to know that both ASICs and GPUs are equally and highly preferred mining hardware that you will get in the market today.
Both these processes will help you to gain handsome rewards, if done properly. It is actually the algorithm for coins that will determine what types of coins each of these two types of crypto mining hardware can mine efficiently and quickly.
However, in order to understand which is better among GPU and ASIC mining, you should have a very clear understanding of cryptocurrencies mining in the first place.
Crypto mining is a starkly different process than crypto trading or buying. Ideally, crypto mining is a process where a specialized computer or mining equipment is used to create new blocks of coins.
This is done usually by solving extremely complex mathematical problems.
This is called the Proof of Work or PoW. It is only when a problem is solved by the miners they get the right to include a new block to the existing blockchain. This process, in turn, ensures that a transaction is legit.
This confirmation of a transaction is very important in order to prevent the most common problem related to cryptocurrencies – double spending.
The miner gets a reward in the specific coins when the work is completed which incentivizes them for their effort put in and their hardware used.
The process becomes more and more difficult as more and more miners join in and it becomes less rewarding over time since there is a fewer number of coins left to mine.
In such situations, the home computers or CPU Central Processing Unit mining proves to be unable to mine more coins.
Therefore, the miners need to shift to using GPUs to generate more hash rate. This proves to be more profitable and the efforts do not go in vain and the electricity bills do not rise.
The specialized ASICs are also good for mining but some coins are ASIC resistant and therefore can be mined by using GPUs only.
Now it is time to find out which is the better one. Ideally, there are two specific considerations that you need to make in order to determine that. These are:
- Return on Investment and
- The electricity efficiency.
Ideally, the ASICs are more advanced, more powerful, more efficient, and much faster in comparison to CPU and GPU mining. Therefore, if you can afford to use it, you will have a chance to make greater profits.
However, these devices are custom-built and therefore are good for a single hash algorithm which will limit its functionality.
This means that you will have to buy different ASICs for different types of coins you want to mine. This will add to your cost of mining considerably and may eat up your profits easily and quickly.
Typically, ASICs are good for big farms that mine specific coins on a large scale. It is easier to maintain a single ASIC rather than six GPUs for mining coins because this will result in more points of failure than one ASIC, and therefore from the maintenance perspective, ASICs are better.
However, ASIC mining can be useless for specific Altcoins such as Monero. It has an emergency hard fork which is not a new coin created.
This is used just to upgrade the code to enhance the performance or to add new features for the same reason. Monero has changed the Proof of Work just to discourage miners from mining the coins though it has not compromised with the decentralized nature.
This issue is even more compounded by Bitmain, the Chinese hardware manufacturer. They now have a monopoly in manufacturing ASIC miners with strong patents.
They maintain nearly 50% of the mining hash power of the entire Bitcoin network. Their highly powerful and efficient mining hardware makes mining more profitable but has also centralized it and thereby depriving the common man of having the power to mine coins.
In comparison, the graphics cards are usually cheaper and widely available than the ASICs and these have other uses apart from mining such as gaming and other complex computing jobs as well.
GPUs can mine most of the crypto coins unlike the ASICs and therefore the GPUs are a safer bet for sure.
These machines are just good for the magnitude since it comes with a higher resale value, profitability, and longevity.
These machines are flexible and will offer you the freedom from mining only one type of crypto coin.
It will also not be affected by the changes made in the algorithms of the coins and will run for five years or more in comparison to an ASIC that you will need to replace with a new rig every year.
Moreover, GPU mining also offers some significant benefits to the network such as allowing making different kinds of calculations on the blockchain.
Otherwise, if you are okay with the high price of the mining rig, if you want to stick to mining only one type of crypto coin no matter what in the long run, if you live in a place where electricity comes at a dirt cheap price, and live in a cooler region, ASICs are the best choice for you by far.
Just keep in mind that the ASICs are not a bad idea or a scam. These are just costly industrial machines fit for large scale mining.
The small or medium-size GPUs are also good for small miners to use them at home as these machines do not need a huge upgrade in the infrastructure or a dedicated facility to run them.
To wrap up the debate in simple words, it can be safely said that the ASICs will not replace the GPUs completely. If they could, they would already have by now and the fact that they did not is a proof that they will not.
Most significantly, the large number of stakeholders in GPU mining will simply not give up and relinquish the whole crypto mining market to ASICs like Bitmain without putting up a fight.
Hopefully, after going through the article, you have come to know a lot more than the basic differences between ASIC and GPU mining. Now you can surely make out which among the two is most suited to invest in for your crypto mining needs.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.