Bitcoin mining has been the way to generate new amounts of the cryptocurrency since 2009. Whether you’re an experienced bitcoin investor or looking to get into the hype, mining blockchain has been an extremely popular way to be a part of the fun. As miners work to uncover bitcoin by verifying transactions that occur with the cryptocurrency, we are beginning to come near the 21 million bitcoin cap. With this being said, many are joining the mining practice to cash in before this, increasing the difficulty of successfully mining.
To best their competition, miners are investing in the use of external GPUs. Because no one knows what will happen to the volatile currency when the limit is reached, miners are eager to secure as much bitcoin as they can. Will the cryptocurrency transition to real world purchases like groceries or home improvement loans? Or will we see the value tank?
If you are new to the concept of mining bitcoin, I will provide a brief overview. Bitcoin cannot be physically printed like money; for more to exist people need to “mine” it. Bitcoin is mined from blocks that comprise all the transactions that have occured with the cryptocurrency. A series of blocks is called a blockchain. By mining the block, aka finding a 64-digit code (either of exact or lesser value), they get some of the bitcoin from that transaction. This brings more into existence and mimics the process of printing money.
As the competition increases in the mining game, the likelihood of making a large profit is decreasing. Therefore, many miners have turned to the use of external GPUs to aid their efforts in mining block before others. If you are looking to improve your mining practice or learn more about the process as a whole, we’re going to look at what a GPU is, what role it plays in mining, and whether you should be investing in one.
What is a GPU?
A GPU, or Graphics Processing Unit, is the part of your computer that is responsible for rendering graphics. It’s typically used when generating images for video. It is activated by the CPU, or Computer Processing Unit, which alerts the GPU that it needs to start generating images. The GPU is amazing when performing quick, repetitive tasks. This is a big part of creating computer images. The CPU acts more as the head of the computer functions; it is responsible for large tasks that take multiple parts.
A GPU runs roughly 800 times faster than a CPU. This is due to the fact that it’s running very similar, repetitive tasks. The CPU in involved in tasks that utilize other parts of the computer and each task varies with what it entails. Mining is mainly guesswork–computers are guessing the 64-digit code until they mine the block. This means that if a miner is using a GPU, they have a better chance at mining the block due to the speed advantage. Therefore, miners are switching over to utilizing external GPUs to have a better chance at guessing the number first.
Is purchasing a GPU right for me?
Two years ago, the only people purchasing GPUs were gamers looking to enhance the graphics, intensifying their gaming experience. However, when GPUs started being utilized in bitcoin mining, the demand shot the price up. If you wanted to get your hands on a GPU, you were either giving up hundreds of dollars for the processor or sticking to your CPU and hoping for the best.
The value of bitcoin is currently about $5,200 USD, taking a hit in value in the past couple of months. This has caused the price of GPUs to normalize again to its typical market price. If you are serious about mining before we reach the cap of 21 million bitcoin, purchasing a GPU might be for you. However, if you’re not sure you want to commit and just want to see what the hype is about, your budget might benefit from sticking to your CPU and joining a mining pool.
The current state of crypto mining
Whether you’re looking to up your mining game or thinking about starting, you may have to reconsider based on your location. It was recently reported by the South China Morning Post that the Chinese economy plans on restricting the use of certain technologies. It was highlighted that crypto mining had made this list.
According to the National Development and Reform Commission, “The elimination categories are mainly backward processes, technologies, equipment and products that do not meet the requirements of relevant laws and regulations, do not have safe production conditions, seriously waste resources, pollute the environment, and need to be eliminated.”