In crypto currency there is a thing call mining. It may sound confusing at the start but it is not too bad.
There are two ways main ways transactions and blocks are verified, mining (POW) and minting (POS).
In this article we will cover mining, to check out minting (POS) go this page
Proof of Work – POW
POW = Proof of work
POW = Mining
Proof of work is mining, this is making computers or any type of device with computing power do hard work to prove that transactions made happened, to make the coin safe.
Ways to mine
- Computer graphics card (GPU)
- ASIC – Application specific integrated circuit
- Computer CPU
- High end phone, tablet or Laptop
- Ps4/ Xbox
Computer graphics card (GPU)
High end computer graphics cards are very common in mining, they are very fast at verifying transactions and blocks. So many people all around the world own graphics cards so the adoption into a new coin can be quick and seamless.
Perks of mining on a graphics card is the cost, you can start small with a PC with just 1 card and over time keep buying more cards when you have the available funds. If for some case mining stops being profitable for you then you can still resell your graphics cards.
2017 and the start 2018 has been an amazing year for mining on graphics cards. With in some cases the ability to make back the total invested money on the graphics card in under 4 months! That means that the GPU has paid for its self in 4 months and you are getting nothing but profit after that time. Of coarse there are other setup costs and power costs to take into account.
There are some setbacks to mining with a graphics card. Because a GPU is designed to go inside a computer case and typically when mining people have large numbers so they have to build custom racks made from wood or steel. These racks do not normally have the same build quality and safety of a pc case, there are some exceptions like sup from wccftech made professional racks with a glass front.
But in most cases home build GPU racks and wiring can cause potential fire hazards from dust build up and poor quality linking components of the GPU. For example low quality of over worked power supply units that are pushed beyond there limits.
One other down side to mining with a graphics card is that it uses lots of power to verify transactions, this is mostly a problem with graphics cards as they are not built for the task and there are so many preforming the same task. There is come crazy fact like all of the GPU mining in the world uses the same amount of electricity as norway!
- Low startup cost
- Good return on investment
- Good resale value
- Hard to rack and stack lots of units
- Bad on the environment
- Not made for the set task.
ASIC – Application specific integrated circuit
You might be thinking what even is a ASIC? Well it does sound like a pair of trainers 🙂
Were your normal at home computer has been built to preform a wide range of tasks like surfing the net, running application, playing games. ASIC is just a computer that has been built to mine a coin, because with mining you are preforming the same task over and over again so things can be made to suit. Also they can be made much more efficient.
For example training somebody to do a wide range of tasks or just one set task. Not only would they be faster at the set task, it would be easier for them and it would take less time to train them.
ASIC mining starts expensive and gets very expensive, we are talking setups worth millions and millions of dollars. So this is mostly reserved for companies that set up massive data centre style equipment.
But in saying that you could start with a small set up for under $5000. For most people this in not the path they take as GPU can normally make more profit and cost less in setup cost, sometimes you might even Graphics card that is capable so no cost is required to give it a go.
- Long term investment
- Stable and compact
- have been made for the set task
- designed to be stacked and racked
- High startup cost.
- Nosy equipment.
- potential bad resale value
Central Processing Unit – CPU
A computer CPU can be used, but in most cases this does not work very well. Only very limited computers can mine to make a profit with a CPU. This is due to a few reasons, most typicle computers can have a max of one CPU per computer. This basiccly means you would need to build a full computer to just have once CPU to mine with. With a GPU you can have 4+ on each motherboard.
On saying this people have done some good mining with AMD Ryzen 7 and threadripper CPU’s, wile Intel CPU’s are not currently profitable. With AMD it would take around a year to make back the investment and Intel it could be up to 3 years.
This puts CPU mining in the bracket that is great for casual users that want to make some of the costs of there system.
- Good for casuals
- Can make back some PC costs
- Only 1 or max 2 CPU per computer
- Bad earning compered to GPU
- Only limited to some processors
High end phone, tablet or laptop
This is one that has me very interested, because i like the concept of recycling old devices with broken screens or some kind of damage to be used again.
Unfortunately most phones and tablets are only capable of making around $10 per year. But the cost of the unit is normally over $100-200 so it would be not profitable to mine with phones or tablets.
some laptops can mine reasonable number but the cost of laptop is far higher than a single GPU that will far out preform the laptop.
In the future i see recycled old phones having a place in mining as they have lots of components that could be used. Like the small CPU and GPU, things like ram and even storage/bandwidth. The potential is there just no coin has been build solely around phones and mobile devices yet.
- Bad returns
- No coin targets mobile yet
- Low power usage
- Future potential
- Can be stacked
There are a few other ways to mine with devices like ps4 pro or xbox one s, but they are software locked and not as good as the typical high end Computer. Back in the day the ps3 had a very strong cpu and was used for mining bitcoin but times have changed.
- Bad return
- Software locked
- Not feasible
There are a few ways to mine, but GPU and ASIC are the best way to do it depending on how much you want to invest. With CPU good for casual users.
Eventually POW will be replaced with POS a more efficient way to verify transactions.