Crypto mining or “cryptomining,” as some call it, is a very popular topic in the crypto space today. However, mining is nothing new — it has obviously been around since Bitcoin was first launched in 2009, because mining is how new Bitcoin are made!
Crypto mining involves solving complex cryptographic equations through the use of computers to get cryptocurrencies as a reward. The computer resource used in solving these complex cryptographic equations determines the type of mining.
The most basic form of crypto mining involves mining with the computing power of an application-specific integrated circuit (ASIC), a central processing unit (CPU). However, today, it is also possible to mine cryptocurrencies with a GPU or graphics processing unit.
What Is GPU Crypto Mining?
GPU mining involves the use of a gaming computer’s graphics processing unit to solve complex math problems to verify electronic transactions on a blockchain.
Normally, to mine a cryptocurrency, digital coins must be built on a blockchain architecture that supports proof-of-work (PoW) mining. Cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Monero (XMR), Litecoin (LTC) and Dogecoin (DOGE) are examples of coins that can be mined.
NVIDIA GeForce GTX 1070: The Most Popular Cryptocurrency Mining GPU
While there are a lot of different graphics cards in the markets, the cards used for crypto mining are those specially designed for gaming, not for video rendering. Shares in GPU manufacturing companies like NVIDIA and AMD have skyrocketed as miners look to earn cryptos with their computing powers. The NVIDIA GeForce GTX 1070 is one of the most popular mining rigs, when considering both its electricity usage, although there are other models out there if you do your own research into will can work for you.
While it used to be possible mine Bitcoin and other cryptocurrencies at home with your laptop, that's no longer an option for most cryptos due to the rising interest in mining, along with the Bitcoin reward halvings. Most mining operations, including the use of graphics cards and specialized mining rigs, are now conducted in shared pools, where participants combine their computing powers into a big group to generate results more quickly. Rewards are handed out to miners after a block of the currency has been mined.
All the participants in a shared pool get a share in the profits based on how much computing power they contributed. In this way, individual computers represent workers in a mine getting paid for searching for the treasure, the block reward.
How Does GPU Mining Work?
GPU mining became a hot topic in 2017 after Bitcoin zapped past its previous highs to peak at just under $20,000 (a little less than half of what it would later reach in January 2021!). Since then, individuals from around the world have sought the best GPUs to get their share of crypto block rewards.
The complex maths functions solved by computers are usually SHA-256 hash functions. In mining, the computer takes the SHA-256 — an encrypted mathematical algorithm — and turn it into an output. The output is always a 256-bit number.
The Sha-256 Hash Function
Encrypted in the SHA-256 problems solved by computers are details of electronic payments and algorithms necessary to secure a blockchain network from attackers wishing to "double-spend." For partaking in the security of the blockchain network, miners are rewarded with crypto coins.
When the computational problem is solved by the mining card, the product is a seemingly-random 64 character output called a hash. On the Bitcoin network, miners have to find a hash that starts with approximately seventeen zeroes. To get this number, a computer has to try multiple times.
Once the hash is found, the block is closed, and the miner/pool of miners are rewarded with newly-created Bitcoin and transaction fees. On any blockchain, the hash rate is the speed at which a miner arrives and finds a hash. The hash rate is measured in giga hashes (GH/s).
GPU Mining Algorithms
Just as there are different cryptocurrencies built on different blockchains, there are different types of cryptocurrency mining algorithms available. The hash (the product of mining) differs on the different types of blockchain.
A hashing algorithm is a cryptographic hash function that maps data of any random size to a hash of a fixed size. These mathematical functions condense data to a fixed size. Because they are smaller, it is more convenient for a computer to compute hashes and solve the problems in the files or data string.
The hashing algorithms available that support GPU mining are the following.
SHA-256, also known as cryptographic hash algorithm, is a cryptographic function. SHA-256 algorithms function on a 512-bit message block and a 256-bit intermediate hash value. The hash rate for the SHA-256 algorithm is measured in gigahashes (GH/s).
The product of mining a SHA-256 algorithm is a 32-byte (256-bit) signature for text strings. The block time varies between 6 to 10 minutes. Bitcoin (BTC), Bitcoin Cash (BCH), Terracoin (TRC) and Peercoin (PPC) are based on the SHA-256 algorithm.
The Scrypt hash function is used by Litecoin (LTC) as an alternative to the more power-hungry SHA-256 algorithm. Solving the Scrypt algorithm is a lot faster than the SHA-256 algorithm. The hash rate of the Scrypt algorithm is measured in kilohashes (KH/s).
Scrypt runs on password-based key functions, which were created for the Tarsnap online backup service by Colin Percival. This algorithm creates many pseudorandom numbers for storing in RAM locations, which makes it almost impossible for large-scale hardware attacks to be performed on a network.
Scrypt was first implemented in cryptocurrency by an anonymous programmer called ArtForz in Tenebrix, then Fairbrix and Litecoin shortly after.
The block generation time of the Scrypt function is 2.5 minutes for many cryptocurrencies. As a result, they can be performed on the GPUs of computers. Dogecoin (DOGE), Latium (LAT) and Bitmark (BTM) are some other cryptocurrencies based on the Scrypt algorithm.
This is the most energy-efficient mining algorithm for GPUs. With the X11 Algorithm, the GPUs can run on 30% less wattage. Proof-of-work blockchains that implement this algorithm run on a sequence of eleven hashing algorithms.
This algorithm was implemented in the Darkcoin protocol (later renamed to Dash) in 2014, specifically made by Evan Duffield to be resistant to ASIC mining.
The hash rate of the X11 Algorithm is measured in megahashes (MH/s). Some of the cryptocurrencies that use the X11 algorithm are Dash (DASH), StartCoin (START), CannabisCoin (CANN) and XCurrency (XC).
The most well-known cryptocurrency to implement the Ethash Algorithm is Ethereum (ETH), the crypto for which this algorithm was initially created. DaggerHashimoto was the name of the first version of the Ethash algorithm, designed by Vitalik Buterin and the Ethereum team to be ASIC-resistant.
DaggerHashimoto is a combination of two other algorithms. The first, the Dagger algorithm, was built as an alternative for memory-intensive algorithms like Scrypt. However, Dagger is susceptible to pressure in shared memory hardware acceleration. The Hashimoto algorithm was designed to attain ASIC resistance by being IO-bound.
The hash rate for the DaggerHashimoto algorithm is measured in megahashes (MH/s). The popular cryptocurrencies that are based on it include Ethereum, Ethereum Classic and Expanse.
GPU Mining Software
GPU hardware is only one part of the equation in mining. To get the most out of a GPU, you would require a mining software equally as good and optimized to produce the best results.
Some of the best mining software available for GPUs are the following.
Claymore miner was one of the most efficient Ethash GPU miners, but when Ethereum hit DAG epoch 384, it no longer worked, as it did not support past epoch 385. The DaggerHashimoto algorithm increases the DAG file every 30,000 blocks, which makes up one epoch — this increase then increases the GPU memory requirements needed for mining.
Claymore software is built with a dual Ethereum miner for mining cryptocurrencies with a similar algorithm without compromising on the hash rate.
Claymore was also famous for constantly rolling out new updates and being well- optimized. Claymore’s Dual Ethereum v15.0 is available for AMD and NVIDIA-based GPU miners. Although specially designed for Ethash, Claymore works excellently with other similar mining algorithms, but it's unclear if it will still work for Ethereum after epoch 384 at this time (February 2021).
WildRig Multi Miner
The WildRig Multi Miner software for GPU mining supports more than 30 different algorithms. WildRig Multi focuses on modern AMD GPUs and is supported on both Linux and Windows systems. The developer fee on the network is set to 2 percent.
KawPow is very popular among miners because of its support for any type of mining pool. The major drawback of this mining software is its lack of compatibility for AMD GPU devices. The Kawpow Miner 1.2.3 is the latest version of this all-purpose mining software as of February 2021.
What to Mine With GPUs
Choosing a cryptocurrency to mine with GPUs is one of the major problems new miners face. In making the decision, one of the most frequently asked questions has been how much one can make from mining cryptocurrencies with GPUs.
To start, the project must be built on a blockchain architecture that supports proof-of-work (PoW) before it can be mined with GPUs. Also, different factors affect how much rewards one can make from GPU, including the block rewards.
The block reward is the amount of crypto given to a miner/pool of miners for completing a block of cryptographic equations on a blockchain.
For example, when Bitcoin launched in 2009, mining one block would earn you 50 BTC. However, in 2012, the block reward was halved to 25 BTC. By 2016, this was halved again to 12.5 BTC. Finally, in May 2020, the reward halved again to 6.25 BTC.
The best cryptos to mine are those that give rewards that can cover the electricity charges used in mining and the cost of the mining device/rigs.
Best Crypto to Mine With GPU
Some of the best cryptos to mine with GPU in 2021 are the following.
Grin is a relatively new cryptocurrency with high block rewards. Although the complexity of mining changes dynamically on the Grin network, mining is relatively easy and the project offers unlimited coins — a joy for miners. 60 GRIN is rewarded per block mined. A grin coin currently trades at $0.34 as of Feb. 1, 2021.
This is one of the few cryptocurrencies created specifically for GPU mining. The architecture is perfectly optimized to support GPU mining. It is also one of the few non-stablecoin cryptos that have a relatively stable price.
Bitcoin Gold implements the Zhash hashing function and offers 12.5 BTG for a mined block. A BTG currently trades at $10.65 as of Feb. 1, 2021.
Litecoin was one of the first users of the Scrypt protocol, meaning the network is best suited for GPU mining. Litecoin can be mined without an ASIC because it uses the SCRYPT protocol. The network also provides high-speed transactions with low fees.
Completing a block earns you a 12.5 LTC. Litecoin is currently valued at $132 as of Feb. 1, 2021.
Now that you've learned how to mine with GPUs, check out upcoming guide into mining with ASICs.