Before the advent of cryptocurrencies, mining referred to the extraction of economically valuable mineral resources from the earth’s crust using labor, machinery and other resources. This process was necessary for the economy, especially manufacturing industries and were used in industrial processes (e.g., Crude Oil) or used as a store of wealth (e.g., Gold). It is an apt parallel for cryptocurrency mining. In cryptocurrency, mining refers to the process of securing a blockchain by using computer hardware to carry out computational processes or solving computational problems. The primary purpose of mining is to prevent double spend by securing the network. However, people need to be incentivized to provide the computational resources needed to do this and this incentive is usually the native currency of the blockchain. The reward is usually received by the first person to solve the computational problem. It should be noted that cryptocurrency mining is used only for Proof of Work blockchains, that is blockchains that are secured by carrying out computational work such as guessing a hash.
A cryptocurrency mining rig is the arrangement of hardware components to perform the computational work needed to secure a blockchain. The profitability of mining depends on a number of factors such as total network hash power, cost of electricity, mining rig, hardware etc. All things being equal, a better mining rig or hardware components should increase the probability of being the first to solve the problem and therefore get the block reward. This has caused a race for better mining rigs up till now. Below is a brief summary of the evolution of mining rigs:
Types/Evolution of Mining Rigs
- CPU mining rigs: The earliest miners used Central Processing Units to mine bitcoin and involved the arrangement of computers together for mining purposes. The best CPUs can attain up to 20 kilo hash/second. except for cryptocurrencies like Monero which are optimized for CPU mining. I will be unsuccessful alongside more advanced mining rigs on the Bitcoin blockchain.
- GPU mining rigs: This involved connecting graphic cards to a computer to accelerate its mining power. GPUs have a lot more hashing power and could reach up to 60 mega hash/second. That is more than two thousand times the best CPU rigs. It quickly almost pushed CPU mining into obsolescence and is still largely used to mine Ethereum and Ethereum classic today.
- FPGA: these were introduced after GPUs and quickly displaced GPUs and CPUs. They could hash up to 20 giga hash/second. They also had the advantage of being programmable which made it easy for owners to reconfigure it to mine another cryptocurrency if one becomes unprofitable or undesirable.
- ASIC mining rigs: soon enough, an even better mining rig was introduced called ASIC miners. ASIC rigs are specifically designed and optimized for one task alone – mining. They are packed with a lot of hash power. Some can do up to 100 tera hash/second already and are improving. These rigs leave almost no chance for CPUs and GPUs and is the predominant mining rig for bitcoin today.