Crypto Mining is not something new but it is a hot topic nowadays. It is a process through which new cryptocurrencies are created. Producing new coins is a very difficult process that takes a lot of energy, time, and computers. Crypto mining is something discussed by every trader since the arrival days of Bitcoin, the first-ever launched cryptocurrency.

The crypto mining process includes solving complex mathematical equations by using computers and as a reward, they receive a portion of the same cryptocurrency or Bitcoin. There are multiple types of crypto mining that are determined based on the equipment being used to solve those cryptographic equations.

Initially, the mining process involved an application-specific integrated circuit generally known as ASIC which is a central processing unit but now it is possible through a GPU (Graphical processing unit) as well. Now that you know about crypto mining, let’s move towards GPU crypto mining.

Miners use their computers to calculate a unique number usually known as the ‘nonce’. A nonce is the short form of ‘number only used once’. During the mining process, miners plug their nonce into some hash function and then calculate it. As this number is random, miners cannot guess it so they need to make thousands of calculations to find the number and it can be done quickly if their processors are powerful. This is where GPUs play their part.

GPU Cryptocurrency Mining

GPUs consist of multiple arithmetic units that perform mathematical computations every fraction of a second to multiply the results. They also decode various hashes repeatedly by changing one digit in every attempt to find the required answer. GPUs are generally categorized based on their hash rates, heating, and power consumption. Good GPUs can earn you 7 dollars in 24 hours on average if the electricity cost is 0.01 dollars per kWh. Conjugating multiple GPUs in a rig enhances the gains considerably.

In the past, GPUs were used by gamers only to render 3D graphics and shapes because GPUs can do complex mathematical calculations in parallel. But nowadays, gaming computers are used for crypto mining because of their efficient performance thanks to their hundreds of parallel processing cores. So GPU crypto mining is a type of mining that involves the usage of gaming computer GPUs.

To mine any cryptocurrency, digital coins need to be built upon a blockchain that allows proof-of-work mining. Bitcoin, Ethereum, Ripple, Dogecoin, and Monero are examples of minable cryptocurrencies.

Most Famous Mining GPU

There are hundreds of available graphics processing units in the market. Some cards are designed for video rendering while some are built for gaming. The cards built for gaming are ideal for crypto mining because they are superior in performance. Ever since miners have started using GPUs for mining, the shares of GPU manufacturing companies like NVidia and AMD have soared greatly. At the moment, the best GPU for mining, from users’ point of view, is the NVidia GeForce GTX 1070.

Previously it was possible to mine cryptocurrencies individually but it is not possible today due to the rising interest rate and reward halving. Plus, it would take forever to mine one Bitcoin on your laptop. If you use state-of-the-art GPU, still it would take you approximately three years to mine one BTC. This is why mining is conducted in shared pools where miners combine their computational powers to generate results swiftly. The reward is then distributed among all the participants according to the effort they make.

GPU Mining Except Bitcoin

Application-specific integrated circuits and field-programmable gate arrays are custom built for the calculation of hash algorithms and are considered more efficient and powerful than Graphical Processing Units for Bitcoin mining. The required number of GPUs to match the hash rate of one ASIC is high which makes it costly to use because they consume more power. Now let’s evaluate the cost and performance perspective of famous GPUs.

A famous gaming GPU Nvidia RTX gives a hash of 150 million hashes every second for a price of 1.5k to 3k dollars. On the other hand, a popular application-specific integrated circuit named Bitmain Antminer T17+ has a hash rate of 64 trillion hashes per second for only 800 dollars. It consumes 10 times more power than the RTX but its hash rate is much higher and is considered superior by miners for mining Bitcoin.

Mining Bitcoin is difficult as compared to mining altcoins so if you are mining some other cryptocurrency such as Monero, Ripple, or Dogecoin, GPUs are a good option. The best way to find out which currency you should mine is by using an online mining calculator. Online mining calculators allow users to select a type of cryptocurrency, available mining hardware, and available power and then show which coin they would be able to mine successfully.

Crypto mining is also possible on an individual level through different software like NiceHash. This software allows its clients to rent mining equipment to others for mining altcoins and in exchange, a portion of the coin is sent to miners as well. You can also rent hardware from others and do mining yourself. Using NiceHash software is simple and ideal for those who don’t like to get into the complications of the command line.

It means that both the options are considerable either to join a mining pool or utilize cloud mining. In mining pools, the hardware of multiple miners is set up in one place to increase the computational power. On the other side, cloud mining is a good choice for those who don’t have the resources to buy their equipment. In cloud mining, users rent mining equipment from firms like HashFlare.

Shortage of GPUs Owing to High Demand

Cryptocurrencies witnessed a massive acceleration in prices in the last quarter of 2020, especially Bitcoin and Ethereum. Seeing this, more people jumped into the crypto mining business and the demand for graphics cards rose 25 percent straight away. This rise in demand has resulted in a shortage of graphics cards which has forced some GPU manufacturing companies to limit the hash rate of new cards.

Another plus point of using GPUs is that if their demand in crypto mining decreases, still their resale value will not be affected much thanks to their general purpose use. Application-specific integrated circuits are on the downside in this regard because they cannot be used for any other purpose so they will lose their value completely if the specific algorithm is not utilized for its programmed use.

In addition, when crypto prices decline, the profits of mining also decrease and resultantly the demand for graphics processing units also reduces. In this scenario, people start selling their GPUs so their prices decrease in the second-hand market as a result of glutting.

GPU Mining Algorithms

The number of available cryptocurrencies is increasing every day on various blockchains. The mining algorithms on every blockchain are different in various aspects, especially the hash rate (the production).

The hashing algorithm of a cryptocurrency maps random size data to a fixed-sized hash. The algorithms (mathematical functions) compress random data to a fixed size. When the random data is sorted in hashes, it becomes easier for computers to process them and solve the mathematical sums. Some of the famous available hashing algorithms are given below.

• SHA-256 Mining Algorithm:

The SHA-256 is a cryptographic function and is also known as a cryptographic hash algorithm. It functions on two different modules, a 512-bit message block, and a 256-bit intermediate hash value. The hashes produced by the SHA-256 algorithm are measured in gigahashes (GH/s). The mined product of the SHA-256 algorithm is a 32 bytes signature for text strings. The time taken for each block formation is approximately 10 minutes. This is one of the highly used algorithms in the crypto world as Bitcoin, Bitcoin Cash, Crown, Eurocoin, Peercoin, and Terracoin are all based on this same algorithm.

• Scrypt Algorithm:

The Scrypt hashing algorithm is being adopted as an alternate option for the SHA-256 algorithm because the latter is more power-consuming. The Scrypt algorithm has also an upper hand in speed as it takes only and half minutes to generate a block. The hash rate of the Scrypt algorithm is measured in kilohashes (KH/s).

This algorithm works on password-based key functions which are designed for the Tarsnap online backup service provided by Colin Percival. Scrypt creates numerous pseudo-random numbers for storing on RAM and as a result, it becomes impossible for anyone to attack this network. Although this algorithm came into popularity after it was used by Litecoin but it was first implemented by an anonymous programmer known as ArtForz in Tenebrix. Now many other famous cryptocurrencies also use this algorithm such as Dogecoin, Bitmark, and Latium.

• X11 Algorithm:

The X11 algorithm is one of the most power-efficient mining algorithms available today for GPUs. When this algorithm is used on GPUs, they consume 30% less energy. Proof-of-work blockchains run on a sequence of eleven hashing algorithms when they implement this algorithm. Resisting the application-specific integrated circuits, Evan Duffield used this algorithm for the first time in the Darkcoin protocol which is known today as the Dash coin.

The hash rate of this algorithm is measured in megahashes (MH/s). Some other cryptocurrencies that use this algorithm include StartCoin, CannabisCoin, and XCurrency.

• Ethash Algorithm:

Ethash is an algorithm that was solely created for Ethereum which is why their names have resemblance. The first version of Ethash, named DaggerHashimoto, was designed by Vitalik Buterin and the team of Ethereum.

Ethash is a combination of two algorithms, Dagger and Hashimoto. The dagger algorithm was created as an alternate option for memory-intensive algorithms such as the Scrypt but the dagger is exposed to pressure in hardware acceleration. The Hashimoto algorithm was also created to resist the application-specific integrated circuits.

GPU Mining Software

Although the hardware is a compulsory thing for mining but it is of no use without good software to support it. Good mining software is required to get the most out of a GPU. Now I am going to discuss some of the most promising software available nowadays for GPUs.

• Claymore Miner:

Claymore miner remained one of the most potent Ethash GPU miners until Ethereum launched DAG epoch 384. The DaggerHashimoto algorithm expands the DAG file after 30k blocks (one epoch) and as a result, the GPU memory requirements increase.

Claymore mining software comes with a dual Ethereum miner for mining cryptocurrencies that have the same algorithms so that the hash rate is not compromised.

Claymore is popular for providing new updates frequently. Claymore’s Dual Ethereum is available for AMD and NVidia GPUs but it doesn’t work for Ethereum anymore after the launch of epoch 384. Its dual miner stopped support for Ethereum in December 2020. 

• WildRig Multi Miner:

The WildRig is a multi-mining solution as it supports more than 30 algorithms. It can be used on Linux as well as Windows systems in combination with modern AMD GPUs. Only a 2 percent developer fee is charged on the network.

• KawPow Miner:

KawPow is a famous mining software because it supports all types of mining pools. Although this software is loaded with features it has a disadvantage as well that it doesn’t support AMD GPU devices. The KawPow miner 1.2.3 is the latest available version of this mining software as of March 2022. 

What to Mine With GPUs

For new miners, it is a difficult task to decide which cryptocurrency they should start mining. While making this decision, the most common question that arises in people’s minds is how much they can make if they mine a cryptocurrency. Miners are given rewards after the completion of blocks but it depends on different factors. To begin with, a project must be created on some blockchain architecture that supports proof-of-work.

At the time of Bitcoin’s launch, miners earned 50 Bitcoins for mining each block. In 2012, the reward was reduced by 50% so miners received 25 Bitcoins per block.  In 2016, the rewards were halved once again to bring it to 12.5 Bitcoins per block. Now, since 2020, 6.25 Bitcoins are being awarded for each Bitcoin but it is a very good price if we look at the current value of one Bitcoin.

Miners prefer to mine those coins that cover the electricity consumption and the cost of mining equipment as well.

Profitable Cryptocurrencies to Mine Using GPUs

Some of the gainful digital currencies to mine with GPUs in 2022 are given below.

• Grin:

Grin is a newly launched cryptocurrency that is offering good block rewards. Though the mining difficulty on the Grin network changes sprightly but overall the mining is easy and fruitful. You would receive 60 Grin coins per block and the current value of one Grin is 0.170 dollars.

• Bitcoin Gold:

Bitcoin Gold was specifically launched for GPU mining so its architecture is fully optimized to support GPU mining. It is an exceptional non-stablecoin that has a stable price. It has implemented the Zhash hashing function and you would get 12.5 coins if you mine a block. Today’s market value of 1 Bitcoin gold is 44.64 dollars.

• Litecoin:

Litecoin was the very first cryptocurrency to use the Scrypt algorithm which means it is suitable for GPU mining and there is no need of using application-specific integrated circuits. Completing mining of one block of Litecoin could earn you 12.5 Litecoins and the price of one Litecoin today is 130 dollars.

• Verticoin:

Verticoin is also an ASIC-resistant digital coin. It is one of the most fruitful digital coins for miners because, at a mining hash rate of 2.50 MH/s and energy consumption of 450 watts, you could make 5 dollars daily. By using the Vertash algorithm, it takes only 2 and a half minutes to mine one block of Verticoin and the reward is 12.5 coins per block.

Bitcoin:

If you want to mine Bitcoin with an application-specific integrated circuit then it is a very profitable option but not if you mine it through GPUs. On the contrary, you can mine it in pools that allow contribution in other crypto but pay rewards in Bitcoin. Nicehash facilitates this type of mining and it estimates that you can use Nvidia GPUs to earn around 0.000125 to 0.0022200 Bitcoin on daily basis. In other words, you can make 6 dollars to 11 dollars daily. As the market value of Bitcoin is higher than altcoins, the majority of miners prefer Bitcoin.

Conclusion

Through the upper given details, we came to know that mining is possible through ASIC as well as a GPU and most of the cryptocurrencies are more profitable when mined with GPUs. GPUs are convenient to set up as their configuration, installation and connectivity are almost the same. In addition, GPUs can be sold as well as they have high demand in many sectors other than mining such as Pub-G players.

We also shed light on some profitable cryptocurrencies and came to know that they become more profitable when mined in pools.