ASICs versus GPUs (Part 1)

 

In the “Two sides to every story” series, we will examine current controversies and issues in the blockchain space. Instead of choosing sides, we will do our best to present information from both (or more!) sides of the argument. Then, you decide!

 

You may have heard expressions like “ASIC-resistance” or “GPU farming” when looking into cryptocurrency mining. Referring to methods of mining, most commonly with ASICs or GPUs, different mining equipment solutions have created a complex dilemma, a lot of disagreement, and a great deal of concern in crypto-mining communities.

In this series, our mission at CryptoMurmur is to provide you with information to help you sift through the facts and make your own decisions about where you stand on a topic. Let’s start by looking at a few different cryptocurrency mining tools along with their advantages and disadvantages.

 

CPU mining

If you go back in time a ways, you would find that older cryptocurrencies like Bitcoin were mined mostly with CPUs — your basic processor. Processors offered the greatest flexibility, able to mine any currency by performing whatever algorithm (a set of mathematical rules to perform calculations) to solve mining puzzles for block rewards, generally referred to as “Proof-of-Work” mining, since the computer proves it has completed the mining task by solving a puzzle, kind of like figuring out a combination lock by trial and error, except with a lot more possible combinations.

 

GPU mining

When GPUs started to be used for mining, they offered considerably more power than the average CPU due to their ability to perform many more calculations in the same amount of time. However, some cards were better at performing certain algorithms over others, depending on the GPU (either Nvidia or AMD-based). To this day, some algorithms are more efficient to mine on one brand, or even one particular card, over another. So, GPUs offered more mining power and efficiency, but a little less flexibility. Once miners began getting into multiple-card rigs, though, the performance differences became much more apparent. A rack of 10 GPUs firing away would decimate the meager calculations of a humble processor. If you had a CPU mining Bitcoin, and someone else had a rack of 10 GPUs mining Bitcoin, it became pretty much impossible to compete as the difficulty ramped up considerably over time in response to the huge increase in GPU mining efficiency as compared to CPUs.

 

FPGA mining

Next we have FPGAs (field-programmable gate array). Without going into tons of detail, let’s just sum them up by saying they are again more powerful than video cards, but can be reprogrammed to specifically mine different algorithms quite efficiently — more so than a GPU, but not quite as efficiently as an ASIC. So, while they are more powerful than GPUs, they are a little less flexible, and are quite expensive. While not as popular as GPUs or ASICs, they seem to be experiencing a bit of a renaissance right now due to their efficiency advantages over GPUs and their flexibility advantages over ASICs.

 

ASIC mining

ASICs (application-specific integrated circuit) are the king of the hill when it comes to pure mining power IF — and that is meant to be a big “if” — IF the algorithm they are specifically designed to mine is worth mining. You see, because ASICs are built from the ground up for the express purpose of mining one specific algorithm, they can only perform this one particular task, and they do this one task very well (hence the term “application-specific”). ASICs are often many times quicker at processing certain algorithms than competing GPUs and usually consume less power, as well, relatively speaking. Zcash, for example, is mineable with an ASIC created by the dominant ASIC manufacturer and designer, Bitmain, a dedicated machine that, when released, was mining around 10,000 sols per second. A few weeks ago, when Zcash was on the upswing, this would have mined nearly $1000 worth of Zcash in a single month, using only 300 watts of power. It completely annihilates all other competitors when it comes to power consumption versus mining reward efficiency and pretty much makes GPU mining the same algorithm pointless in comparison.

Having said that, if Zcash were to change their algorithm (currently it uses one called Equihash), this ASIC would no longer perform any purpose other than to mine less valuable cryptocurrencies that happen to use the Equihash algorithm. It basically would become a doorstop at this point if there were not any other profitable currencies using the same algorithm. So it can be pretty risky to invest in ASICs, whereas GPUs can just mine a different cryptocurrency if there is one that is more profitable to mine.

So ASICs can provide a greater immediate pay-off with higher mining returns than GPUs, but run the risk of being nearly worthless if a currency’s developers decide to alter the algorithm. GPUs, on the other hand, offer less risk as they can simply be pointed to another profitable currency’s algorithm and keep mining away.

GPUs also tend to keep their resale value better and can be added to an existing rig or swapped out of a mining rig for upgrades, if the miner wishes to do so. ASICs usually cost a few thousand dollars initially, but will rapidly drop in price if a popular currency’s algorithm is changed, whereas GPUs do not exhibit this risk and can be used for other applications (like gaming), so they are far easier to resell later and do not drop in price nearly as quickly.

 

Seems pretty straightforward…. So what’s the controversy?

Come back for Part 2 to read more!

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