How GPUs Are Used In Cryptocurrency Mining

Finjan TeamBlog, Cybersecurity

Finjan How GPUs Are Used In Cryptocurrency Mining

The increasing market activity and sometimes astronomical rise in the value of cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Ripple in recent months has done more than create profit-making opportunities for eager investors.

There’s been a knock-on effect on the computer market, as more people realize the potential to make money through creating these digital assets by generating them through the complex mathematical processes collectively known as “mining”.

Cryptocurrency mining is a hardware-intensive operation, typically putting the most pressure on the processing units at the heart of a computer or gaming system. Both central processing units (CPUs) and graphics processing units (GPUs) may be involved.

It’s the give and take between GPUs and the cryptocurrency mining ecosystem that we’ll be looking at in this article.

What’s a GPU?

A GPU or graphics processing unit is a piece of specialized hardware responsible for governing the video rendering system of a computer or gaming console. It typically executes and controls the rendering of visual effects and 3D-graphics, so the central processing unit or CPU (responsible for operating system and file operations for the system as a whole) doesn’t have to take this additional work on board.

Graphically demanding tasks such as video editing, gaming display, and the decoding and rendering of 3D videos or animations are handled by the GPU. To do this, a standard GPU may possess 800 times more speed than its associated central processing unit.

How GPUs Are Used In Cryptocurrency Mining

Cryptocurrencies are digital entities, and most of them are generated through a process known as mining. This requires complex mathematical problems to be solved, in order to create each unit of cryptocurrency, or to power the encryption (where the term “crypto” comes from) and other processes occurring throughout the distributed ledger or blockchain, where cryptocurrency transactions are recorded.

Each different cryptocurrency denomination has set a limit to the number of tokens it issues. So as each mining procedure creates a “coin” or whatever, the ceiling for available coins drops – and the mathematical formulas which have to be solved to create new ones become a step harder.

With cash or digital credit on offer for each successful mining operation, there’s money to be made – and stiff competition between individuals and organized groups, vying to make it.

Bitcoin – the best-known and most highly valued cryptocurrency – requires very complex math and huge amounts of electrical and processing power to generate. So Bitcoin mining is largely the reserve of groups or individuals with access to the latest and most powerful computing equipment.

Less high-profile cryptocurrencies like Ethereum and Monero demand less computing power to mine. Small-scale operations using central processing units (CPUs) to do the mining calculations are possible.

But GPUs (graphics processing units) are designed for high performance in similar or repetitive tasks such as rendering scenes with slight moment to moment variations – or doing repeated calculations with only one or two digits changing each time. GPUs possess a large number of Arithmetic Logic Units (ALU), precisely for this purpose. This is why GPUs are much better suited to cryptocurrency mining than CPUs.

Supply and Demand

With high valuations dominating the news, the “cryptocurrency fever” gripping financial markets has also infected the mining sector. Individuals and consortia have been snatching graphics cards off the shelves, looking to add them to their battery of computing power, and increase their chances of beating others to the punch, when it comes to generating new cryptocurrency assets.

This has created a run on market-leading brands of GPU – and fueled a shortage of these items, which has been driving up their prices.

The supply-demand effect has been in evidence since 2014, when the price of AMD 280x boards on the international market went from $220 to $440 (CAD), virtually overnight as the first global flurry of interest in Bitcoin began.

With the rise of lower-grade (in terms of processing power to mine them) currencies like Ethereum, the demand for GPUs has risen. Cards like the Nvidia GeForce GTX 1060 (which retailed for around $200 in April 2017) have inflated in price, costing anywhere from $400 to $800 as of January 2018.

Knock-On Effects

With graphics cards and their associated GPUs fast disappearing from the consumer market, this shortage has been having a knock-on effect on other consumer graphics and computing products.

GPUs are often bought as separate units by users wishing to construct their own computer or gaming systems with high-performance rendering and graphics. The diminishing supply of mid- to high-end graphics cards from big names like AMD or Nvidia is impacting this section of the consumer market worldwide.

The Startling Effect on Astronomy

It’s not just PC and console gamers who are suffering from the crypto-mining led run on GPUs. Mass-market graphics cards have been instrumental in supporting the work of radio astronomers across the globe, as well.

The computational and rendering power they provide has been the backbone of projects like SETI (the Search for Extra-Terrestrial Intelligence), and the Hydrogen Epoch of Reionization Array (HERA), a vast radio telescope based in South Africa. These multi-part or crowd-sourced projects have been hit financially by the sudden hikes in price, due to the GPU shortage that’s resulted from cryptocurrency mining.

Some Possible Solutions

In response to the GPU shortage, manufacturers and retailers have been taking proactive steps. Some distributors are placing limits on how many GPUs can be bought in a single purchase, while others are offering discounts to customers who buy graphics cards in “PC gamers” packages with other products.

AMD has announced that it’s increasing production of graphics cards, to help meet the growing demand. But these efforts may be hampered by ongoing shortages in the types of memory used by its highest-selling products.

In the longer term, it’s possible that the growth of higher-end technologies like Field Programmable Gate Arrays (FPGAs) and Application Specific Integrated Circuits (ASICs) – both of which are better than both CPUs and GPUs at performing the hash calculations essential to blockchain management – may reduce the pressure on the GPU supply.

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Finjan How GPUs Are Used In Cryptocurrency Mining
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Cryptocurrency Mining | GPUs Better Suited for Crypto Mining than CPUs
Cryptocurrency mining is a hardware-intensive operation, typically putting the most pressure on the processing units at the heart of a computer or gaming system. Both central processing units (CPUs) and graphics processing units (GPUs) may be involved.
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