Which type of crypto mining rig is relevant today? Right from the standard desktop computers used in homes to the CPU miners, and from the GPU miners to the latest ASIC machines, the world has seen people using different types of computers to mine crypto coins.
And, now it is the time for the FPGA miners and cloud mining.
With so many variants used right from the early days of Bitcoin, you may tend to think which specific miner is relevant today considering the ever-changing scenario of crypto mining.
This in fact is the common question among the beginners in crypto mining.
Well, to understand that, you will need to look deep into the matter and this article will help you in that.
All these different forms of crypto miners not only differ in their nomenclature but also in the capabilities in terms of mining new crypto coins.
When crypto transaction and mining was just a hobby in the initial days, way back in 2009 and after, it was sufficient to use a desktop computer used in homes and offices for it.
As time passed, the needs changed along with the changes in the crypto scene.
Over the years, crypto mining became a popular and a more productive way to earn new coins and more and more people therefore and naturally, started to take interest in this specific digital asset class and got into crypto mining.
This increased interest in and participation by the people increased the level of competition and mining difficulty in the process and the mining rewards were reduced, a process called halving.
Therefore, people needed more power to compete with each other and be the first one to win the reward, thereby needing more powerful machines.
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Which Type of Crypto Mining Rig is Relevant These Days?
As you may know, crypto mining is a process in which there is nothing to ‘mine’ literally.
Instead, it is the process in which several people within the blockchain network use their computers, called nodes, to solve a complex mathematical or algorithmic puzzle.
They need to do it to authenticate and confirm a crypto transaction before it is added to the blockchain as a new block.
A lot of puzzles need to be solved in quick time and a lot of people are engaged in it at the same time to be successful.
They all have to compete with each other and be the first one to solve the puzzle.
There are lots of permutations and combinations needed to be made to come out with a final result that will be accepted by all other participants in the specific blockchain network.
All these need a lot of computing power.
However, they do not do this for gratis.
The blockchain network in turn rewards them in the same coins or in transaction fees for their efforts, time, and most importantly, their computational power put in, which has helped in keeping the blockchain secure and free from attacks.
This entire process is called crypto mining.
Well, the gist of matter is that with a lot of people involved in crypto mining it is necessary to use a powerful computer with high hash power or computational power to solve the puzzle first.
This has brought in the change in the crypto mining machines making the use of a standard desktop as before for mining new crypto coins quite meaningless and obsolete.
Today you will need a proper mining rig for that matter. These machines are different from the standard computers.
Though the components may seem the same, these are quite different in terms of power and functionality.
And, with continual development in the field of technology and along with that the ever-increasing competition and difficulty in crypto mining, more and more sophisticated crypto mining rigs are being manufactured.
These new machines introduced in the market help the miners a great deal making it easier for them by providing a lot of computational power.
All these mining setups, more commonly known as mining rigs, not only vary in computing power, performance and efficiency, but also can vary in size, scale, and price.
Now choosing one among these setups for your mining needs will highly depend on a few specific factors apart from the price.
These are:
- Hash rate
- Energy consumption
- Adaptability and
- Space available.
It will also depend on the pros and cons of each and therefore it is important for you to know the relevance of each of these mining setups in today’s context.
But, before that you will need to know a few basic and more-than-the-basic aspects of crypto mining and the mining rigs.
Different Types and Shapes
With the evolution of crypto mining, the mining rigs also evolved.
Today, the crypto mining rigs comes in all possible forms such as:
- The Central Processing Unit or CPU miners
- The Graphics Processing Unit or GPU miners
- The Application Specific Integrated Circuit or ASIC miners
- The Field Programmable Gate Array or FPGA miners and
- Cloud mining.
All these different types of miners come with different pros and cons and offer different levels of hashing power to the users but serve the same purpose – to help in mining and earn the mining block rewards.
As said before, the crypto mining rigs come in different shapes, types, scales, and sizes.
However, they also have different names.
While most of the users call them mining rigs, there are people who call them by other names such as:
- Crypto miners
- Bitcoin miners
- Mining hardware to name just a few.
All these different miners come with different processors, circuits, and hardware and computer power to help in mining cryptocurrencies.
A few of these crypto mining systems are purpose-built and costly but most of the mining rigs available in the market are general-purpose mining systems that are not as costly as the specialized mining rigs.
In fact, these general mining rigs resemble pretty much like the average computers but are quite good in assisting the users in their crypto mining endeavors.
Usually, the crypto mining systems, irrespective of their size and types, can be used for mining any type of crypto coins across all blockchain networks that use the Proof of Work or PoW consensus protocol.
This is a specific mechanism that allows securing the process of verifying and confirming any crypto transaction made on the said blockchain.
At the same time, this specific protocol prevents double spending as well as other blockchain attacks.
One of the most common and popular types of crypto coins mined by the people is Bitcoin.
Though this is the most widely known Proof of Work blockchain, there are also several other established blockchain networks such as Ethereum 1.0 that are also quite popular among the crypto miners.
Therefore, with such a wide variety of blockchain options available to use and mine new crypto coins, it is quite natural that you will need a standard circuitry for general crypto mining and a bespoke mining hardware for the more advanced ones.
Though the purpose of all these mining systems remains the same, the difference lies in their technical features.
And, the crypto miners are usually concerned about two particular aspects of the mining machines more than anything else.
These are:
- The hash rate and
- The energy consumption.
The primary reason behind this is that these are the two main factors of the mining systems that will determine the mining profits.
The hash rate of a mining system is usually measured in hashes per second, denoted as h/s.
The higher is the hash rate the higher will be the speed of the machine and the likelihood to solve the cryptographic problem which is necessary to win the block reward for mining.
If the hash rate is low, the system will be slow in verifying transactions and the chances of winning the rewards and making profits will be reduced significantly.
On the other hand, if the mining system consumes a lot of energy while producing average results it will eat away whatever profit is earned through mining rewards.
This is because both the hashing power as well as the energy efficiency of the mining rig will not be enough to make the mining process and returns profitable since the total cost of electricity may be much more than the total value of the mining rewards received.
Therefore, the miners typically look for the electricity consumption by the mining rig both in terms of the overall energy consumption as well as the efficiency of the machine with respect to hashes per kilowatt-hour.
Well, both these factors will not matter much to you if you simply want to mine to help the network maintain its security and contribute to the far-ranging mission of the decentralized network and expect nothing in return.
But, just like most of the crypto miners, if you too are engaged in crypto mining with a hope to make a profit in the process then the hash rate and energy consumption by your mining rig should surely bother you and keep you on your toes.
And this is where the relevance of the different types of crypto mining systems steps in.
CPU Mining Relevance
To understand whether CPU mining is a thing of the past or is still relevant today you will need to understand the basics of it first before condemning and condoning it right away.
The CPU miners use the power of the Central Processing Unit to solve the algorithmic puzzle and mine crypto coins.
The CPUs used in these types of miners are pretty much the same type of CPUs that you will find in everyday hardware such as the desktop and laptop computers.
These CPU miners were used widely and most successfully by the people during the very early days of crypto mining, or Bitcoin mining to be very precise.
The CPUs of their desktop or laptop computers could easily mine block rewards.
However, all these were possible way back in 2010 or early in the last decade because there were only few miners engaged in the process at that time and therefore the competition level was insignificant.
Add to that, less competition translated into a higher rate of success.
Moreover, the Bitcoin blockchain network was itself in its infancy and therefore the overall requirement of hash rate was pretty low as well and therefore a CPU miner was enough back then for the users to make profits and earn new coins.
However, over the years the popularity, awareness, and acceptance of Bitcoin increased and so did the level of competition and mining difficulty.
This made mining Bitcoin with the CPU miners largely and literally obsolete since the rewards were not ‘readily available’ as before.
Therefore, if you are not living in the dark ages and reading an article from the early 2010s, you will hardly find any mention of CPU mining in any article today with respect to Bitcoin mining.
However, a closer look may show a completely different picture with respect to CPU mining relevance today especially for other types of crypto coins.
There are a few specific blockchain networks that come with mining algorithms that are specially designed to be CPU-mining friendly.
Some of these blockchain networks include that of:
- Zcash
- Bytecoin and
- Monero.
The main reason behind maintaining such an algorithmic design is to let the ordinary retail crypto miners take part in the competitive mining process and compete with the institutional miners who make large scale profits.
This, they believe, will not allow the institutional miners to dominate mining altogether on all other major blockchain networks.
In addition to the intention of making things and the mining scenario more equitable, this principle also guarantees that mining decentralization is maintained through these specific projects.
Now, the question is how relevant is this type of project today given the fact that CPU mining is a fad of the past and no large-cap PoW blockchain networks support it anymore.
Moreover, even if any miner considers following the CPU mining process it will be quite difficult, if not impossible, to utilize hash power and electricity efficiently in such cases.
This means that the miner will not be able to compete with other miners.
According to simple math, CPU mining is measured in kilo-hashes per second where a kilo-hash equals 1,000 hashes. In most cases, a CPU miner will be able to achieve a maximum of 8 kh/s to 20 kh/s, and only a few of them will be able to cross the 20 kh/s threshold.
All these figures are quite pale in comparison to that of the other varieties of crypto mining rigs available in the market today.
Shifting to GPU Mining
Therefore, the CPU miners are replaced by the GPU miners and are still going strong.
The GPU miners have been able to keep up with the needs of the growing number of miners and the competition level.
As a result, the miners can now mine most of the crypto coins that come with a large cap.
This is because the GPU miners have a much higher hash rate and mining efficiency as compared to the CPU miners.
Taking over as early as in 2010, the hash rate of the GPU miners is measured in mega-hashes per second and not as kilo-hashes per second as the CPU miners.
One Mega hash is equal to 1000 Kilo hashes or a million hashes.
Therefore, the GPU miners are much better in performance as compared to the CPU miners.
However, the level of performance of the GPU miners will depend on the price and age of the graphics card.
Still, most of the GPU miners can perform at a rate more than 10 Mega hashes per second with some of the more efficient ones nearing 60 mh/s.
Simple math shows that a GPU miner with a hash rate of 40 mh/s will provide power that is equivalent to the power provided by 2,000 CPU miners with a hash rate of 20 kh/s.
Therefore, the GPU miners are able to process a lot more operations in comparison to a CPU miner, and that is for a system with just one graphics card.
There are several mining systems that use a large number of graphics cards.
For example, if you use a GPU miner with 6 graphics cards, the performance level will be enhanced with 6x hashing power, and a mining system with 12 GPUs will perform 12 times higher, faster, and better.
Now, if you want to enhance the hashing power several times than that, you can even use a number of these multiple-GPU mining rigs, all running at the same time.
For your home-based setting, you can run as many as 24 to 48 such GPU rigs concurrently, provided you have proper outlets and electric supply, and all other requirements.
Therefore, you can well imagine what happens in those small to medium sized crypto mining farms!
The GPU miners have another good trait which is that they offer a certain amount of flexibility apart from more efficiency allowing you to mine a wide variety of crypto coins on different blockchain networks that come with distinctive mining algorithms.
However, in spite of all these features and benefits offered by the GPU miners which have quickly replaced CPU mining, their dominance was also pretty short-lived, in fact it was felt till 2015.
Though after that and till date GPU mining systems are used quite extensively by the crypto miners, the dominance on crypto mining shifted to an entirely new class of crypto mining hardware, the ASIC miners.
Dominance of ASIC Miners
Most people believe that the ASIC miners are specifically designed to do one, and only one thing – mine crypto coins.
The first of these crypto mining machines was released in the market in 2012 and since then it has shown its power and has announced that it had arrived to dominate the crypto mining sector.
These dedicated crypto mining machines are usually 200 times more powerful than any standard GPU miner, which leaves it out of the reach and comparison with the CPU miners.
As mentioned above, the hash rate or computing power of the GPU miners is measured in Mega hashes per second but, in comparison, that of the ASIC miners is measured in terra hashes per second where one terra hash is equal to 1,000 Mega hashes or a trillion hashes.
Some of the best ASIC miners can perform at a rate of 90 to 100 terra hashes per second which is much, much more than the best GPU miners.
However, these machines are extremely expensive which is why most of the users are unable to invest in it and use it to enhance their chances to make more profits.
Though this price factor holds the ASIC miner back a bit from an absolute dominance on the crypto mining sector, it can prove to be more profitable considering the other variable such as:
- The electricity cost
- The scales and
- The mining network difficulties.
Ideally, the ASIC miners are just good for large scale mining ventures and for those users who have a lot of money in their hands to invest such a huge amount in these sophisticated machines.
There are also a few other specific downsides of the ASIC miners apart from the cost.
If you want to be competitive, using the ASIC miners will only be feasible if you can use them at a large scale to the extent of hundreds or thousands of these machines.
This also means that you will need to have a large warehouse to set them up all together.
Add to that, the natural attributes of crypto such as its volatility, price fluctuations and others may not guarantee high returns always and constantly.
This means that your cost of electricity, rent, maintenance and other overheads will be much more than the amount of money you make from mining crypto coins using the ASIC machines.
Also, you will not be able to get the flexibility offered by the GPU machines when you use the ASIC machines because these miners are specially designed to mine a few specific types of crypto coins such as Bitcoin.
This is because the ASIC miners are optimized for the SHA 256 algorithm.
Add to that, there are a few specific types of crypto projects such as Ravencoin and Monero that are designed deliberately to remain ASIC-resistant.
Therefore, using an ASIC machine to mine these coins will not at all be cost effective.
Once again this deliberate difference in the structural design of these coins is intended to level the playing field of the particular blockchain network allowing all miners, big and small, to take part in it.
All these downsides of the ASIC miners could not supplant the GPU miner completely.
FPGA Miners
Then there is the Field Programmable Gate Array or the FPGA miners that are considered as the best of both worlds by some people.
These miners are often more efficient and much faster in comparison to the GPU miners.
These particular types of mining machines are called Field Programmable because it allows the users to configure them after these machines are delivered to them.
And, the terms Gate Array signify the logic gates which can be optimized for crypto mining and other specific purposes because these can be programmed.
The best part of these FPGA miners is that they support most of the mining algorithms having the capability to reconfigure them to allow mining a wide variety of crypto coins.
This is one specific aspect that the ASIC miners lack which is why the FPGA miners are so favored.
These special crypto mining machines offer much more hashing power and balance it with its wider flexibility and support to varied cryptographic algorithms.
However, once again, the performance level of these FPGA machines can also vary widely.
Ideally, these machines can perform at a hash rate ranging between several 100 Kilo hashes per second and more than 20 Giga hashes per second where one Giga hash is equal to a billion hashes.
There is one significant downside of these FPGA miners which is the not-so-user-friendly set up process of it as compared to the other type crypto mining rigs.
You will need to design the software as well as the gate array yourself for setting the system up and also download a bitstream or an FPGA mining algorithm. This will simplify the setup process of the rig but for a fee.
Cloud Mining
If you are looking for rig-free crypto mining then cloud mining will allow you to do that.
This is a good option which will save you a lot of money as you will not need to invest in a costly crypto mining hardware.
You can find several such cloud mining service providers who will offer such services and contracts that you can buy.
The good thing about cloud mining is that it will allow you to mine crypto coins indirectly.
This means that you will not have to pay for those sunk costs and spend a lot of money on hardware maintenance.
You will get different types of cloud mining service contracts to buy which may vary based on the hash rate and duration of the service provided which can range anywhere between a couple of weeks to years.
Cloud mining services can be very cost effective because you can even use those highly efficient ASIC mining machines depending on the particular service provider you choose.
Well, you can also choose to rent the ASIC miners remotely yourself to get additional flexibility.
But then it will involve additional costs for maintenance and setup apart from having significant technical knowledge so that you can configure the miners remotely yourself.
However, when you do choose a cloud mining service make sure that the provider is reliable and reputable to avoid scams and frauds. Also, hire such service when the demand for it is pretty low because such contracts are often sold out.
Future Prospects
Now, you should know about the future prospects of these crypto mining rigs and PoW blockchain as well so that you find it easy to determine whether you should rely on the GPU miners or go for the ASIC and FPGA miners.
Well, to start with, the CPU miners are more or less out of the question. Now, it is left to the GPU, ASIC, and FPGA miners.
Crypto mining, as such, will always rely on the blockchain infrastructure in spite of the fact that there is a proliferation of Proof of Stake blockchain networks than the PoW consensus protocols.
It is the increasing demand for the popular and mineable coins that the demand of the compatible miners is also on the rise.
And, this is going to stay but the form of the mining rigs may change over time.
It may be hard to buy and use the ASIC machines that are most popular because these machines are often sold out even in the secondary market in spite of its high cost.
Therefore, the GPU miners seem to have an edge over the other solutions but the increasing hash rate requirement by the blockchain networks will not let the other types of mining rigs leave the market.
Therefore, the mining rigs overall will be most sought after. You may choose one type of it or a combination of two which is your personal decision but make sure that you make your choice based on a few specific parameters such as:
- Your investment philosophy
- The time horizon
- Your risk tolerance
- Level of your technical knowledge and more.
Also consider the pros and cons of each of these mining solutions before you make your final choice.
Conclusion
The type of crypto mining hardware you should invest in is your personal decision and is based on your needs but you should know about all the available options to make a better choice.
Thanks to this article, now you know about them and the benefits.
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.
