Posted 12th Mayıs 2021

What Is GPU Mining?

In this article, we’ll help you to understand how GPUs are used in mining rigs and how you can mine effectively with them.

Since the early 2000s, cryptocurrency miners have been adapting their software and hardware to meet the high power requirements needed to solve the complex mathematical problems required to process transactions securely.

Graphic processing units (GPUs) were traditionally used to support the rendering of visual effects or graphics so a computer’s central processing unit (CPU) didn’t have to cope with processing the minute details of videos or games. Now, they are alternative hardware that is being more widely used in cryptocurrency mining rigs to break down the blocks in the chain.

What does GPU mining mean?

Processing blocks of approved transactions in cryptocurrency blockchains requires a high level of power consumption. To process the transactions and complete proof of work mining (PoW) at scale, cryptocurrency miners build specialist computers that use a combination of software, hardware and processors to solve complex mathematical problems and algorithms quickly.

When cryptocurrencies were first introduced, the processing of the blockchain was done by computer CPUs. However, as more people have begun crypto mining and the process has become more difficult, extra processors needed to be used to mine cryptocurrencies quickly and effectively.

Application-specific integrated circuits (ASICs) are the other main type of processor that are used for cryptocurrency mining. Built specifically for this purpose, they’re often considered to be the best processor option by miners. In contrast, GPU mining uses graphics cards or GPUs to verify cryptocurrency transactions on the blockchain.

Originally designed to process visual information, GPUs and graphics cards can be repurposed to compute mathematical operations in parallel and were part of the first rigs that upgraded from those using CPUs.

Why did GPU mining start?

The growth of GPU mining began when Lazlo Hanyecz purchased two Papa John’s pizzas for 10,000 bitcoin in May 2010. This gave the cryptocurrency inherent value and led to growing popularity in bitcoin mining. In addition to this, the code that enabled bitcoin GPU mining was released to the public in October 2010.

This, the relatively affordable cost of GPUs and graphic cards and the power of a GPU rig set up led to the growth in this mining technique. Plus, setting up a rig with a GPU took very little technical knowledge or huge computer power. A set up designed mainly for mining hobbyists, it wasn’t until the introduction of field-programmable gate arrays (FPGAs) and ASICs that rigs became powerful enough to turn crypto mining from a side hustle into an industry.

What algorithms can you process with GPU?

In order to solve the mathematical problems that secure cryptocurrency transactions, GPU systems use a hashing algorithm. This algorithm maps data of any size to a hash of a fixed size to help the computer solve the problem. The most common hashing algorithm that is used in GPU mining is SHA-256 which the computer takes to turn into an output, which is always a 256-bit number.

Other algorithms that are used in GPU mining include:

  • Scrypt: which runs on password-based key functions and has a block generation time of around 2.5 minutes.
  • X11: the most energy-efficient algorithm, it uses 30% less wattage from the GPU and was designed to be ASIC resistant.
  • Ethash: previously known as DaggerHashimoto, this was also developed to be ASIC resistant and is mostly used for Ethereum, Ethereum Classic and Expanse currencies.
gpu mining gpu rig bitcoin litecoin ethereum mining software engine depiction

What does a GPU rig look like?

Although traditional GPUs are powerful and were useful in the original crypto mining rigs, they were developed mainly to deal with visual processing rather than specific mining functions. Recently, businesses like NVIDIA have started to develop crypto GPU products that are built specifically for gaming and mining purposes rather than video processing.

These new hardwares do make GPU rigs more powerful, however many miners using GPU systems work in shared pools to use their joint processing power to make their cryptocurrency mining as effective as possible. These pools can mine blocks more quickly and therefore earn more of the currency in a shorter time.

In order to be effective, GPU rigs also need to use compatible mining softwares. Some of the most popular include:

  • Claymore miner: designed to mine both Ethereum and Ethereum Elassic, it can mine other cryptocurrencies with similar algorithms without reducing the hash rate.
  • WildRig Multi miner: this supports more than 30 different algorithms and can be used on Linux and Windows systems.
  • KawPoW miner: this can support any type of mining pool which makes this software one of the most popular on the market. However, it isn’t very compatible with AMD GPU devices.

By combining the GPU hardware with one of these softwares in a computer system, you can start to mine a range of different cryptocurrencies effectively.

What cryptos can you mine with GPU?

When choosing a cryptocurrency to mine with GPU, it’s important that you consider whether the cost of setting up and running the rig and establishing a blockchain architecture that supports PoW will be met by the block rewards you receive for your or your pool’s mining efforts. For example, the rewards for Bitcoin (BTC) GPU mining is an eighth of what it was just over ten years ago.

If you’re thinking about what to mine, these coins are some of the most common for GPU miners.

  • Bitcoin: as mentioned above, GPU bitcoin mining is less profitable than it was in 2009. Plus, bitcoin mining is bad for a GPU that isn’t specifically engineered to deal with the high levels of processing power required. However, its derivative, Bitcoin Gold (BTG) has an architecture that makes it one of the most profitable coins for GPU mining.
  • Grin: one of the easiest coins to mine via GPU, Grin is relatively new on the market and offers unlimited coins for miners. Plus, 60 GRIN is rewarded per block compared to 12.5 for BTG.
  • Litecoin: thanks to its innovative Scrypt protocol, this coin can be mined without an ASIC. This also means that the network can provide quick transactions with low fees and is highly compatible with the GPU mining process.

Whichever cryptocurrency you decide to mine, ensure that you’re reviewing its value regularly to ensure you get the best return on your GPU investment.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.