A Brief History of Mining Hardware
It all started way back when, some 10 years ago. Back then, the computing power of a domestic PC – or, to be more precise, its CPU (central processing unit) – was sufficient for people to mine Bitcoin at home. A lot has happened since then: Bitcoin is now mined an industrial scale, with highly specialized computers known as “miners” combined to create mining farms.
As awareness of Bitcoin began to grow, so too did its value and the number of computers engaged in mining around the world. However, the more computers engage in mining, the more complex the algorithms become and the more computing power is needed to mine Bitcoin. This meant that PCs with ever greater processing power were needed to earn Bitcoin and, very soon, the CPU of conventional PCs was simply not enough.
Bitcoin Mining Inflates Price of Graphics Cards
In the next stage, miners – the name given to both specialized mining computers and the individuals who use these computers to mine Bitcoin – began to use graphics cards. The graphics cards in PCs are designed to process complex 3D graphics in modern computer games. However, graphics cards proved particularly effective at mining cryptocurrencies, with Bitcoin leading the way.
The migration from CPU to GPU (graphics processing unit) mining boosted mining performance 50 to 100-fold. A side effect of this move was that Bitcoin miners attracted the scorn of PC gamers. This was because, in late 2017, the price of graphics cards soared in the face of immense demand. All the while, the Bitcoin network and the computing power requirements continued to grow.
FPGAs and ASICs
FPGAs (field-programmable gate arrays) were then used from late 2011 and proved to be even more energy-efficient than GPUs. However, these were soon surpassed by the first ASICs (application-specific integrated circuits). These represent the final stage in the development of modern miners. While CPUs, GPUs, and FPGAs can also carry out other calculations besides executing the Bitcoin algorithm, ASICs are programmed to fulfil one specific function – and do so more efficiently than any other chip. An ASIC programmed to mine Bitcoin is only capable of mining Bitcoin.
This represented a further 50-fold increase in efficiency compared to GPU technology while simultaneously reducing energy consumption considerably. Using ASICs for Bitcoin mining was the final generational shift in the technological development of mining hardware. CPUs were replaced by GPUs which were, in turn, ousted by FPGAs. Then came the miners based on ASIC chips. Today, gradual progress is being made in increasing the efficiency of ASIC-based miners. However, we shouldn’t expect anything like the exponential performance increases that previous developments have delivered.
The Inner Workings of a Mining Computer
So, what does an ASIC miner look like? The Antminer models produced by Chinese manufacturer Bitmain are one of the most common mining computers and consist of a silver metal case about the size of a shoe box. The Antminer S17 is the company’s latest model. Weighing in at 11 kilos, it is made up of the following components:
- 3 hashboards with a total of 144 ASIC chips (the actual data processing center)
- Control board (combines all functions and, among other tasks, establishes the internet connection)
- 4 fans (for cooling)
- Power supply unit
The ASIC miner is programmed with the SHA-256 algorithm to enable it to mine Bitcoin. When in operation, the Antminer S17 emits a noise of 82 decibels.
Power Consumption Is Decisive
The Antminer S17 consumes between 1.3 and 2.8 kilowatts per hour, depending on the operating mode selected. This demonstrates how the price of electricity is the most important cost factor in Bitcoin mining. Nowadays, mining Bitcoin is the preserve of professional outfits and takes place on an industrial scale. Hundreds or even thousands of miners might be grouped together in large, air-conditioned data centers.
Northern Bitcoin AG, for instance, is a company that places high importance on drawing the electricity for its miners from renewable energy sources. It operates its miners in a computing center housed in a former mineral mine in Norway. It draws the electricity for its miners from the hydropower available in large quantities in the region.