GPU Mining – Full Guide
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There are different methods of obtaining digital coins or cryptocurrencies. You can buy from various exchanges or from individuals; you can receive them as payment of goods or services as well receiving them as gifts. However, the primary method of acquiring cryptos is to mine them. Mining in the cryptocurrency industry involves solving complex cryptographic computations to get block rewards in terms of digital coins. Different cryptocurrencies have varying systems and rules of mining as well as varying systems and amount of rewards.
At the initial stages, anyone could mine these coins using their personal computers, but as the mining difficulty increased, companies began manufacturing specialized mining hardware called “mining rigs”. These are specialized computers that combine computational powers to make solving the algorithms a bit easier. The machines are, however, very expensive and might not make economic sense to buy them at the current market prices in relation to the coins you can mine.
What is GPU Mining?
GPU mining or Graphics Processing Units mining is the use of graphics cards to solve cryptographic problems required in cryptocurrency mining. Using graphics cards is much more efficient than using the ordinary CPU (Central Processing Units). Graphics cards combine their hashing power to make it easier for them to solve the complex mathematical problems. One mining rig can have two or more graphics cards.
GPU miners work a bit differently from CPUs. Unlike CPUs that distribute their computational power to various tasks, GPUs are designed to perform similar and repetitive tasks making them more efficient and faster than CPUs. Since the mining process needs high efficiency in performing repetitive tasks, GPUs are appropriate for this particular computation.
GPUs also have Arithmetic Logic Units (ALU) that assists these components to perform complex mathematical problems at a fast rate. They enable the GPUs to perform a high number of mathematical problems in a short time.
There are different kinds of GPU hash rates for different coins. It is important that you identify first the coin you want to mine before investing in these machines. NVIDIA and AMD graphic cards are the most popular for mining most coins that allow mining. AMD cards are good for Ethereum, one of the most promising digital currencies while NVIDIA cards are good for Zcash coins.
Pros and Cons of GPU Mining
There are various advantages and disadvantages of mining with GPU. Let’s first look at the advantages
- GPUs are faster than CPUs hence will enable you to have a higher hash rate.
- Cheaper than other advanced machines like ASICs and FPGAs and you can get them easily.
- Ideal for mining altcoins unlike ASICs that are coin specific.
- They have a high resale value.
- They are easy to upgrade.
- Consumes a lot of electricity and heats up too much. There are places where electricity is deregulated. If you live in such a place, GPUs can be a bit profitable for you since you will get electricity at discounted rates.
- Not suitable for mining bitcoins at the moment.
- Slower than advanced miners.
- Requires very large equipment so you will need enough space to set up the rig.
- Produce a lot of noise.
GPU Mining Profitability
If you intend to mine Bitcoins using GPUs, you are a little too late. Bitcoin’s hashing power has increased tremendously making it very difficult to solve its algorithm. Furthermore, there are miners with more advanced machines that have a higher hashing power than GPUs. It is difficult to compete with such. However, GPU mining is ideal for altcoins.
- Hashrate – there are various types of GPUs machines suitable for different coins. Different GPUs have varying hashrates, which is the speed at which they compute to solve the given algorithms. GPUs have a significantly lower hashrate than ASICs and FPGAs and are thus not suitable for mining Bitcoins. You can mine other digital coins like Ethereum, Dogecoin, and Litecoin though they are also not as profitable.
- Power efficiency – GPUs consume a lot of power. If you live in an area where the cost of electricity is high, then this venture would not be profitable for you. You’d be in a better position buying the coins. There are areas in which electricity is deregulated. In such localities, you can mine at a profit since the cost of electricity will be lower. GPUs have to run consistently for them to find a block reward.
- The cost of the GPU –the cost of setting up a mining rig is very high. With the craze in crypto mining, many people have rushed to get these cards pushing up their demand significantly. The cards are retailing from $800 – $1500 and are very difficult to find in the first place. Considering the already existing competition in crypto mining and the increase in difficulty of algorithms, it would be unwise to invest in such rigs.
- Maintenance cost–GPUs heat up too much and require adequate cooling equipment. Some companies have begun producing frames and fans to help with the cooling. These machines run constantly and have to be checked regularly, making their maintenance cost to be very high. Considering the difficulty involved in securing these coins, it might not be a profitable venture. However, if you decide to focus entirely on mining and have the patience to wait for an extended period, then you can make some profits.
- The coin you are mining – the coin you are mining is a big determinant of whether you are going to make profits or not. Cryptocurrency prices are extremely volatile. They shift every now and then. If you identify or are lucky enough to land on a promising coin then you can make some handsome profits. The opposite, though is also true. You can make big losses if the coin you choose plummets in value. GPUs are safe though since you can always change the coin you are mining to another thus diversify your portfolio and distribute your risk.
Is GPU Mining Still Profitable?
This depends on the factors we’ve just discussed above. If you are mining just for fun or as a hobby, then you can go ahead if you already have the equipment. You can earn a dollar or two in a day or just about $45 in a month. You cannot consider this a business since the rate of return on the investment is very low. You may want to be a little conservative when investing in a GPU mining pool.
If you decide to invest and focus entirely on mining, then you can make some money in the long run. If you invest in GPUs that cost between $4000 and $6000 or above, you can manage to mine coins worth at least $60 per day, which translates to about $1800 per month. In a few months, you will have recouped your initial investment. This, however, depends also on the performance of the coin you choose in the market.
Most coins are trying to write new codes that will be ASICs resistant. This move is in a bid to democratize the cryptocurrency world since it is now controlled by a few individuals and companies. Most new coins have designed algorithms that allow only ordinary computers to mine. It means then that GPUs could still be useful in the long run as advanced mining machines are rendered useless.
If you do not have enough funds to set up an expensive rig, you can join others with less powerful but cheaper machines like your and form a mining pool. You bring together the computational power of your computers to have a combined hashing rate. Any block reward you secure is divided depending on the power contributed by the group members.
Best GPU for Mining 2018
Nvidia GeForce GTX 1070
Price: around $550
This card is one of the best GPU mining cards for mining altcoins. It has a high hash rate of 30 MH/s and consumes less power. It has a power draw of about 150 watts. It comes with 8 Gbps memory clock, three 1.4 display ports, one 2.0 HDMI and a DL-DVI. You can mine coins worth around 37 USD if the electricity cost is 0.1 USD/kWh. Other coins like Litecoin and Dogecoin can be more profitable. Note that this card is a bit expensive.
AMD Radeon RX 580
Price: around $400
With this mining GPU, you get a power draw of 185 watts, one 1.4 display port, and a 2.0 HDMI port. It gives you a hash rate of 29 MH/s and does not consume a lot of power. It is one of the most popular of the GPU mining cards. With the cost of electricity at 0.1 USD/kWh, you can mine coins worth around $35 per month.
Nvidia GTX 1070 Ti
Price: around $600
You can mine bitcoin mining GPU worth around $36 per month with an electricity cost of 0.1 USD/kWh. This card has a power draw of 180 watts. It does not consume power that much but is higher than its counterpart the 1070. It has a core clock of 1,6070MHz and a memory clock of 8GHz. It comes with three 1.4 display ports and a 2.0 HDMI. It is a bit costly but effective for GPU mining 2018 with its high hashing power.
AMD Radeon RX Vega 56
Price: around $1300
This is also a popular graphics card that you can use to mine cryptocurrency. It has a power draw of 210 watts meaning that its power consumption is a bit on the higher side. It comes with 8GB HBM2 memory, three 1.4 display ports and an HDMI port. It can get very hot when running consistently. With electricity cost at 0.1 USD/kWh, you can get coins worth around $80 in a month. The card is too expensive though, so you’ll have to be patient to recoup your initial investment.
Nvidia GTX 1080 Ti
Price: around $1000
It is the most powerful graphics card at the moment. It has a power draw of 250 watts making it unpopular due to high power consumption. However, if you want to mine as well as play games, then this is the ideal card for you. It comes with three 1.4 display ports and a 2.0 HDMI, one 6 and 8 pin power connectors and a core clock of 1,480MHz. Its memory clock is 11GHz and can reach a hash rate of 32 MH/s. Please note that it is very expensive and also takes a lot of maintenance costs. With electricity cost at 0.1 USD/kWh, you can get coins worth around $60 in a month.
In a Nutshell
We have seen that mining using GPUs came about after miners discovered that they could compute the algorithms much faster than the CPUs due to their parallel nature of operation. GPUs are dedicated processors focusing on a specific task hence their efficiency. Getting adequate profits from GPUs requires you to invest a considerable high amount of money and wait for sometime to break even. This also depends on the performance of the coin you choose to mine and the overall GPU mining profitability. In general, it is no longer so profitable to mine using GPUs since hashing rates continue becoming difficult with time and more and more people get into the market to mine the limited coins.
We are grateful you took the time to go through our publication. Keep checking our site for more of informative articles in the cryptocurrency industry.