Have you ever asked yourself what is cryptocurrency mining all about, and have you ever wondered how to start crypto mining?
It has been more than ten years since the creation of Bitcoin. On January 3, 2009, Satoshi Nakamoto generated the most famous block in all the chains - Bitcoin’s genesis block and attached a message to it: “The Times 03/Jan/2009 Chancellor on the brink of second bailout for banks.” It was proof that the first block was created on January 3 and a comment on the instability of the banking system. It also implies that bitcoin’s purpose is to bring necessary change with the new concept of “unwarranted economy” and decentralized monetary system in which anyone is allowed to participate.
Since then, numerous other crypto coins have emerged, different concepts have sprung to life and mining, which continues to define cryptocurrencies in their modern form, evolved significantly. So what is crypto mining exactly?
The 1st generation of crypto mining is called CPU Mining. Among its benefits simplicity, affordability (no need for expensive hardware) and lower power consumption. At the dawn of cryptocurrencies, people could mine bitcoins efficiently due to the little difficulty of necessary calculations.
Back then, only a handful of people actively mined bitcoins. And because there were so few participants, it was easy to mine bitcoins from any computing device. In those distant days, when mining could have been performed on almost any device, few considered mining as a viable business operation.
But as time passed, the number of miners grew, the total hash amount became higher, the difficulty began to increase dramatically. It required more and more computing power, so miners were forced to turn to GPU (graphic processing unit) mining and then to ASIC (application-specific integrated circuit) mining.
Today individuals almost don’t stand a chance because of the enormous mining pools that are mining with the tremendous capacity derived from powerful hardware that requires a hefty sum of money.
GPU Crypto Mining
As the price of bitcoin grew, the popularity of mining cryptocurrencies grew with it. And so did the desire to have an advantage over others. All that led to the race to improve the hardware for mining. The miners began to add GPUs to their mining platforms, which allowed for higher processing power, as they were able to hash at a higher rate than traditional CPUs.
As using GPUs became a widespread technique, the difficulty of mining increased dramatically, which in turn created the need to put together even more powerful hardware devices to stay relevant.
ASIC Takes Over
Over the years, ASICs have been used for many different purposes. In the 1980s, the first ASICs aimed to enhance computer graphics. As ASIC is a piece of hardware designed for some specific use, it was only a matter of time before it was applied to mining.
As the profitability of mining continued to surge, ASIC manufacturers began to develop their products for enhancing the mining of cryptocurrency. New ASICs were designed to solve hashing algorithms as quickly as possible. Among the leaders of ASIC’s manufacturers were Bitfury and Bitmain, which quickly took over the industry. According to different estimates, a Bitcoin ASIC can be 100,000 times faster than the most powerful CPU at calculating hashes.
But there is one drawback to this pretty picture.
Because of the high level of specialization required, specific ASIC can only mine coins from the blockchain it was designed for. So to engage with mining on different blockchain networks, you have to buy different ASICs.
Resistance Against ASIC
Naturally, ASICs are extremely expensive to acquire and to use, because they consume a significant amount of energy. That makes it challenging to purchase and maintain for an average person. And while Bitcoin’s blockchain was quickly conquered by ASIC hardware, other networks attempted to become ASIC-resistant. Their developers believed that it could be a threat to equality and democracy – an integral part of any blockchain network.
Because Ethereum designed its proof-of-work consensus model to be ASIC-resistant, there is not yet any ASIC equipment to mine the Ethereum blockchain. But ASIC-resistant does not mean ASIC-proof. And it is hard to say whether eventually it will be developed to mine those networks as well.
Mobile Crypto Mining
As for mobile mining, it is possible, but it comes with a long list of reasons not to. It will never bring enough profits to be worth the time and effort.
Also, mobile mining is only available for Android smartphones. Apple banned mining apps from the App Store back in 2018. So no mobile mining for iOS owners. But even though there are tons of apps created for Android mining, you won’t find them on Google Play. Google also banned all mining apps due to the harm they can cause for the devices, causing battery damage and overheating.
Cryptocurrency mobile mining is easy - all you need is a mining app and a decent smartphone. But in the long run, what may have seemed like a way of making extra cash can turn into damaging your device and more expenses.
Future of mining
As mining continues to evolve, the technology continues to advance to keep up with the increased difficulty of mining. And as long as the miners seek the possibility to extract more and more profits, they will continue to buy more and more ASICs to increase their capabilities. Until the next technological leap, of course, then they will start buying a new generation of devices.