Etherium Mining – Why Your GPU Just Gained Value

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Etherium Mining - Why Your GPU Just Gained Value

Anyone involved in a computing HND will have most likely considered building a PC. It’s a great hands-on way to learn about the essential components of a computer system and it could help you gain the confidence to supplement your academic knowledge. If you’re considering jumping into the PC building world, hold that thought. Sooner or later you’re going to realise that you most likely need a graphics processing unit (or GPU). For some, the GPU is the most exciting part to buy – imagine watching nothing but 4K videos and rendering videos in minutes instead of hours. Unfortunately, thanks to something called ‘Ether’, GPUs suddenly became extremely difficult to come by.

So What’s Going on in the Ether?

Ether is the currency of a blockchain network known as Ethereum. A blockchain is an algorithm and distributed data structure. Essentially, a blockchain network uses a number of connected computers to confirm a transaction has taken place. Whereas a bank usually holds information on transactions, inside a blockchain every computer holds the information regarding all transactions. This makes it virtually impossible to double spend, as each unique transaction is recorded thousands of times over. Once a consensus is reached regarding recent transactions being unique (and not double spent), the information is cryptographically sealed into a block. This follows on from the previous sealed block into a kind of accepted history. Unlike the winner’s version of history though, this one is traceable.

For Bitcoin, another large blockchain network, the connections that confirm the consensus in the blockchain are called nodes. Every time a new block is settled (recent transactions are confirmed as not double spent) a reward, in the form of the cryptocurrency, is given out at random to a node. This is called mining.

For Bitcoin, the time for the block to be confirmed is 10 minutes. Once a transaction is made, 10 minutes later it will be locked in. Ethereum, in contrast, has a block time of 12 seconds.

Unlike Bitcoin, Ethereum mining is rewarded not at random, but to the computer/s that do/does the work. Computers run complex, long-form hashtag algorithms to extract a unique cryptocurrency code. To find the code, the computer must begin cycling through every possible solution until the correct string of letters and numbers is found. The miner who gets the correct algorithm is awarded the block and earns five Ether (currently $989).

Ethereum is also not limited to money. Bitcoin is purely focused on cryptocurrency transactions, like an exchange of goods. Ethereum, on the other hand, can include contracts that are verified by all the connections within the network.

Why Do GPUs Have to Suffer?

The short answer is GPUs are great at carrying out the same task over and over again. Whereas a CPU makes decisions, instructions and processes information from all components in a PC, a GPU only runs mathematical graphical processes over and over. It would be akin to having a million monkeys with calculators (GPU) vs one smart man (CPU) both doing simple calculations. The sheer manpower (or monkey power) means that eventually the job will get done, although the smart man could obviously do it, just not nearly as quickly. The GPU limits itself to lighting up pixels on the screen in the correct order, whereas the CPU reads information from the hard drive, writes information to the hard drive, interprets input from the mouse and keyboard, runs programmes…

Burn to Earn

So more (and more powerful) GPUs equals more chances to ‘win’ the block, right? Yes, in its most basic form this is how it works. However, the Ethereum network currently carries out ‘39 trillion hashing operations per second’. A mid-weight GPU, like the GTX 1060 6GB, sits somewhere in the 25 million hashing operations per second category. Obviously, it might take a while before you end up winning a block. That’s why independent miners join together to form mining pools where each member is given a share based on the capacity of the machine engaged in the hashing operation.

So our advice to budding computer builders? Wait for the Ethereum bubble to burst before starting your build.

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