Bitcoin Mining Hardware

In order to mine bitcoins, you’re going to need a mining rig – a high-powered computer. Initially, most bitcoin mining was done with ordinary home PCs, but over time specialized hardware has been developed for the sole purpose of mining. Here are the main types of hardware that can be used to mine bitcoin:

CPUs: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. However, the network’s difficulty level is so high now, this method is no longer viable. Using just a CPU it could take years to mine a single coin at this point.

GPUs (Graphical Processing Unit): It was soon discovered that high end graphics cards were much more efficient at bitcoin mining.  Some GPUs allowed for a 5,000 to 10,000% increase in bitcoin mining power, while using far less power per unit of work. Any modern GPU can be used to mine, however the AMD line of GPU architecture is far superior to the nVidia architecture for mining bitcoins.

FPGAs (Field Programmable Gate Array): The Butterfly Labs FPGA ‘Single’ was the first chip specifically dedicated to mining bitcoins. While the FPGAs didn’t enjoy a 50 to 100 times increase in mining speed, as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400W of power, whereas a typical FPGA mining device would provide a hash-rate of 826 MH/s at 80W of power. This 5x improvement allowed the first large bitcoin mining farms to be constructed at an operational profit. This was the start of bitcoin mining as an industry.

ASICs (Application Specific Integrated Circuit): An ASIC is a chip designed specifically only for mining, and cannot be repurposed to perform other tasks. ASICs offer a 10,000% increase in hashing power over previous technologies, while also reducing powerful consumption. ASIC is considered the “end of the line” when it comes to disruptive technology, there is nothing to replace ASICs now or in the immediate future. Any refinements to ASIC products will be incremental, nothing like the 10,000% increase in hashing power that the introduction of the ASIC brought. ASICs have a longer expected useful lifetime than any previous mining hardware. It is conceivable that an ASIC device purchased today could still be mining in two years if the device is power-efficient enough, and the cost of electricity does not exceed its output.

Most bitcoin mining operations now rely completely on ASICs, as it is simply the most powerful and most energy-efficient mining hardware available. However, older types of hardware can still be useful. Bitcoin utilizes the ‘SHA-256’ protocol as proof-of-work, whereas Litecoin (and many other altcoins based of it) use ‘scrypt’, a completely different type of encryption that is not compatible with ASICs. As a result, GPUs are still the best way to mine most altcoins.

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