Over the last 10 years bitcoin network supporting devices have grown technically. Cryptocurrency mining equipment has become a guarantee for the success of bitcoin networks. It is the technical capacity that determines a miner’s profitability: the speed of computation by blockchain transaction building requires a lot of performance. Today, we will talk about the stages of development of the technology for mining, as well as look at its promising innovations
Mining on the CPU
In early 2009, Satoshi Nakamoto, the creator of the bitcoin idea, got his first BTC block. He was essentially the only bitcoin “miner” at the time, so Nakamoto did not need any special equipment to run a blockchain. Satoshi opened bitcoin blocks by using the power of his CPU.
What is a CPU? CPUs respond to user commands by analysing their data. At the inception of bitcoin, any user needed a minimum of processing power to start a new block and receive a reward in the form of a crypto-coin. Back then, the CPU was running without any workload, but over time, the mining equipment had to be upgraded as bitcoin networks began to add new players and competition for rewards increased dramatically.
GPU and FPGA mining
The first technical breakthrough in mining hardware came after the rise of BTC. One year after the discovery of bitcoin, programmer Laszlo Hanec gave away 10,000 bitcoins for just two pizzas from Papa John’s. At the time, the transaction brought them about $25. In October of that year, one bitcoin was worth 10 cents – that’s when the first GPU (graphics processing unit) device was created.
Unlike CPUs, GPUs, or graphics cards, do not support all the work of a computer. They mainly serve as extra power to optimize computer games, but a graphics card can easily parallel other operations, such as mining bitcoins.
Statistically, GPU mining produces blocks up to 6 times faster than their CPU counterparts. Because of the higher efficiency, GPUs have doubled in price compared to CPUs. Already in 2011, dedicated models with FPGA and FPGA integrated circuits have become the best alternative for mining and thus exceeded the success of the GPUs. The reason for that is the power of FPGAs – they are twice as fast as even the more expensive graphics processors.
Of course, FPGA have the disadvantage that they require a complex configuration, i.e., a miner must apply special code to run it. That said, the customization of FPGA hardware features allows for a more optimized mining process.
The major breakthrough in the mining process was made by the ASIC system. The mining giants, represented by large cryptocurrency companies, have invested in the development of new mining equipment. Not surprisingly, their predictions came to fruition: in 2013, Canaan Creative announced the first dedicated integrated circuits (ASICs).
These devices are designed solely for the purpose of cryptocurrency mining, so all ASIC components were designed and optimised to form new blocks of coins. While Canaan Creative was taking the fruits of its ASIC brainchild, its smaller competitors (Bitmain, MicroBT, etc.) started releasing new optimized ASIC models with smaller chips
Cryptocurrency market analysts continue to argue that the main reason for the perennial evolution of mining devices is the rapid growth of bitcoin against the dollar. Because of this, mining is becoming more profitable every year as the reward system is based on building blocks: the higher the price per BTC, the more interest in the mining process will be awakened.
Prospects for mining
Since 2015, the ASIC chip optimisation process has been slightly reduced: no radically new technologies have been discovered in the cryptocurrency market that increase the efficiency of mining. However, the need for innovation, according to mining experts, is still present. Due to the general availability of mining products, the efficiency of a particular piece of equipment hardly differs from its new counterpart. As a consequence, miners have to explore other areas with less competition. Nevertheless, the demand for cryptocurrency mining rewards is still pushing hardware developers to strive for technological evolution. The question of when the next mining technology upgrade will happen is still open.