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GPU crypto mining explained

GUP mining is the mining of cryptocurrencies using a GPU (Graphics Processing Unit) to solve complex mathematical calculations called “hashes’ instead of purely using the CPU as was more common in the early days of crypto.


Before we get into the specifics of what GPU mining is, we should briefly cover what crypto mining is, for those that may be new to crypto and are still learning. 

Mining is the way that new crypto is created by cryptos that use what is known as proof of work (PoW). 

Very simply proof of work (PoW) is the solving of complex mathematical puzzles or hashes as they are known and being rewarded in coins. 

Bitcoin uses proof of work as does Ethereum at the moment, although this is likely to change soon. 

However, we won’t go into that. For now, it’s important to understand what mining is and what proof of work is in order to be able to understand what GPU mining is.


The basics, what is a central processing unit (CPU)

In any computer, whether that be a Mac, PC or any other type of computer there sits a CPU or central processing unit. 

This is effectively the brains of the entire computer. The CPU handles calculations and the use of the computer’s resources. 


GPU vs CPU mining

In the early days of Bitcoin, it was possible to mine Bitcoin using a relatively modest computer and the CPU was capable of handling the task of solving complex mathematical puzzles or ‘hashes’ pretty easily. 

As the number of miners exploded it became ever more competitive and the computing power naturally increased as each miner competed with other miners to solve the puzzle first and be rewarded with coins and transaction fees. 

The race for higher computing power and the need to solve the hashes or mathematical puzzles faster led to the discovery of using a GPU or Graphics Processing Unit to take over the heavy lifting from the CPU and do a way better job.


What is a GPU?

A GPU stands for Graphics Processing Unit and is a piece of hardware that is either a separate card or is part of the motherboard and is responsible for rendering complex graphics. 

The GPU is used heavily in gaming and video rendering. 

The GPU says to the CPU, “hey, leave those heavy mathematical calculations to me, it’s what I’m good at, you worry about the other stuff”. 

Okay, the GPU doesn’t talk but if it did it would probably say something like that. 

So the GPU is a dedicated piece of hardware that is capable of over 800 times the processing power of a CPU. 

You can see straight away why the GPU became attractive to crypto miners. 

The GPU is solely responsible for video-rendering or mathematical problem-solving in the case of crypto mining, whereas before the CPU handled it all. 

By bringing in a dedicated resource, the CPU has to work less hard and has a better qualified and more capable resource, the GPU to take care of the complex problem-solving.


What is GPU mining?

Very simply, GPU mining is the mining of crypto using a graphics processing unit (GPU). This would be as opposed to CPU mining, where the central processing unit (CPU) is handling the mathematical puzzle-solving as well as ensuring that the computer as a whole is functioning.


What are the advantages of GPU mining?

The primary advantages of GPU mining are:

  1. Speed
  2. Easy maintenance and upgrades
  3. Better energy efficiency
  4. Handle complex calculations better



A GPU-based mining rig can be up to 800 times faster than a CPU-based one, additionally, it is common for mining rigs to use more than one GPU to provide even more power, it’s not uncommon for a GPU mining rig to have three powerful GPUs. 

This will blow a single CPU-based mining rig out of the water!


Easy maintenance and upgrades

A separate GPU generally tends to have updates and can more easily be exchanged for a replacement unit if it fails or can later be easily upgraded for a newer, more powerful model. 

This is not so easy or generally possible with CPUs.


Better energy efficiency

Graphics Processing Units (GPUs) provide a more energy-efficient way to mine crypto when compared to CPU mining. 

GPUs conserve energy better. High energy use is a common issue and criticism of crypto mining.

Handles complex calculations better

Whilst you can throw complex problems at CPUs they will get hot and this could cause problems and even lead to a system failure which is the last thing a crypto miner needs. 

A powerful GPU or series of GPUs on the other hand is way more efficient and better suited for a demanding and intensive task like crypto mining.


What about alternatives to GPU mining?

While GPU mining has no doubt superseded CPU mining, GPU mining is still utilising hardware actually designed for gaming and graphics-intensive applications like video editing or gaming. 

An alternative is ASIC, which stands for Application-Specific Integrated Circuit

Instead of using general-purpose integrated circuits for mining, ASICS are integrated circuits specifically designed and optimised for the demanding task of crypto mining. 

They are literally designed for the job. ASICS generally beat CPUs and GPUs when it comes to reduced energy consumption and computing capacity.



Crypto mining is still very much in its infancy in relative terms, let’s face it, bitcoin only appeared on the scene in 2009 and in those days almost any half-decent spec computer could be used for mining. 

Fast forward to today, the stakes are way higher leading to intense competition amongst miners and an endless technological race for faster and more powerful mining rigs that can complete the hashes the fastest and claim the rewards. 

The GPU has certainly played its part and still continues to be used, although more dedicated ASIC-based mining hardware is generally favoured for serious mining rigs. 

For now, though GPU mining can still be considered valid although it’s fair to say that its days could be numbered.

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crypto hash power

The hash power or hash rate is the combined computing power of a cryptocurrency network or the computational power of a mining rig on a crypto network that is solving cryptocurrency Proof of Work hashing algorithms.

Hash functions are a key part of, not only cryptocurrency protocols but also security systems within information technology as a whole. 

The “crypto” in cryptocurrency actually comes from the cryptography used in cryptocurrencies to make them secure. 

It’s how Bitcoin came about in the first place. 

Cryptography has been in use for many years outside of cryptocurrencies for highly secure authentication and encryption protocols.

In crypto, SHA256 is used to generate secure hash algorithms. Secure Hash Algorithm 256 (SHA256) was developed by the US government’s National Security Agency (NSA) to convert text of any length into a fixed-size string of 256 bits or 32 bytes. 

If the NSA developed and uses it, it ought to be pretty secure!

What is hash power?

Using SHA256, the sentence What is hash power? would look like:


Now imagine, your password being the above, pretty hard to crack and way harder to guess than say the name of your favourite pet, 123456 or even password. 

Yes, a surprisingly large amount of people actually use 123456 or password as their password!

To crack the hash code above on the other hand would take a lot of time and computing power which brings us nicely to how crypto mining works and how hash power fits into the picture

Crypto mining and hash power

In crypto, bitcoin and other cryptocurrencies often use a process called proof of work (PoW) in order to earn crypto in exchange for solving complex computational problems. 

Solving these complex computational problems uses a lot of computing power. 

Miners try to solve these problems in exchange for a reward of a certain amount of coins such as bitcoin. 

Each hash that is created is totally random and generally impossible to predict, it can easily take millions of guesses (hashes) before the correct hash is guessed and the lucky miner wins the right to fill the next block and add it to the blockchain. 

At this point, a block reward of freshly minted coins is awarded to the successful miner as well as any corresponding fee payments attached to the transactions that are stored in that particular block.

How is the hash rate or hash power measured?

The amount of computation power used by a crypto network or a mining rig is called hash rate or hash power. The hash rate/hash power is the computational power used per second when mining. 

In other words, it is the speed of mining and is measured in units of hash/second. To be precise, it’s exactly how many calculations can be performed per second.

Computers or mining rigs with a high hash rate or high hash power are highly efficient and are able to process a lot of data in a single second. 

If we were to look at Bitcoin as an example, the hash rate/hash power would relate to the number of instances hash values are calculated for proof of work every second.

Hash power units are usually measured as follows:

k – kilo or 1,000 hash calculations per second

M – mega or 1 million hash calculations per second

G – giga or 1 billion hash calculations per second

T – terra or 1 trillion hash calculations per second

The hash power of an individual device is a key metric for measuring the potential profitability of a mining rig as it can help to determine the possibility of finding a good hash that is able to generate a mining reward. 

More hashes successfully found equals more rewards. As mining gets ever more competitive, more powerful rigs are needed in order to win the right to the next block.

Using auto manufacturing as a way to understand hash power

An easy way to make sense of hash power or hash rate could be to use auto manufacturing as an example. 

The number of cars produced by a factory per day could be like the hash calculation per second, instead, here it´s the number of finished cars per day. 

A large-scale, highly automated and highly efficient car manufacturing plant could churn out a lot of cars per day, using Volkswagen as an example that would be over 26,000 cars per day. 

On the contrary, a highly specialised and small car manufacturer like Morgan could maybe produce only 3 cars per day. 

Using these examples Volkswagen would have a way bigger hash power than Morgan due to its investment in sophisticated robotics and efficient production lines and will produce way bigger results/output. 

Not only would Volkswagen produce more output it will no doubt be way more efficient in terms of the resources required to build a single car thus being more profitable per unit. 

In crypto mining, a large and highly efficient rig with a large hash power would be capable of a way larger number of hash calculations per second compared to a very small mining rig.

Hash power and security

Continuing with the auto manufacturing example, the total hash power of a cryptocurrency like Bitcoin also relates to the security of a network, the higher the hash power, the greater the difficulty for hackers to infiltrate and manipulate the system. 

In much the same way, it’s way more difficult for an outsider to bring down a huge corporation like Volkswagen due to its huge resources, but much much easier to bring down a smaller player. 

For an attacker to hack, say Bitcoin, let’s call it the Volkswagen of crypto, they would need to overcome the total hash power of the entire network, this is almost impossible, however, a very small network with a low hash power would potentially be more vulnerable. 

In crypto as well, bigger is certainly better!


In summary, the hash power or hash rate is very important in crypto, both in terms of efficiency and potential profitability and also in terms of security for the crypto network as a whole. 

As competition increases, mining rigs need to be ever more powerful in order to be able to win the hashes that will, in turn, reward them with valuable coins and the security of the entire network needs to be rock solid in order to attract more users and increase transactions.

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