Why don’t we buy mining machines for mining instead of graphics cards? (Why use graphics cards instead of CPUs for mining)

Why don’t we buy mining machines and buy graphics cards for Bitcoin mining? In December 2017, NVIDIA’s chip sales had already stopped. At that time, TSMC also announced the launch of a new product called the M30S series memory, stating that this new product would enhance its performance and be more expensive. However, in early 2018, the changing market conditions caused some investors to turn to other brands and channels, so they sold their mining equipment and bought graphics cards – hardware that may be seen as “speculative gaming props”. Currently, Bitmain has relaunched its latest flagship product, the T17 series, with the same attitude, and it is said that this product has officially gone online on the trading platform. However, the prices of these graphics cards are not cheap at present. Some manufacturers even choose to pre-order in response to the drop in coin prices. Therefore, many investors believe that this halving trend is just the beginning.

So why don’t we buy mining machines and buy graphics cards for mining? There are two reasons: first, the price of Bitcoin is too high; second, the mining power required for Bitcoin mining is too large to meet the demand. Third, Bitcoin mining requires a large amount of computing resources to support network operations, and it also needs to consume a lot of electricity. This creates a big problem: “If there is not enough power for mining.” The answer to this problem is that the increase in the overall network computing power of Bitcoin is limited, and mining profits will also be very low (e.g. 1 Gwei). Furthermore, mining itself is relatively difficult. As more and more players join the mining field, the mining difficulty will increase. There may also be other factors, such as the troubles ordinary users may encounter when participating in cryptocurrency mining, such as improper computer configuration, excessive use of graphics cards, manually splitting graphics cards into multiple fragments and mining with different drivers, which can lead to insufficient funds. In addition, some users are worried that the mined Bitcoins will become digital gold, but this situation will not last in the long term. “In fact, many people know such a situation, that is, after mining a Bitcoin, you take it out and store it for a while, and then you want to mine it again.” Although most miners do not fully understand this process, according to research, about 60% of all Bitcoins in circulation in the current market were mined during the bull market in 2018. Of course, most miners are not particularly optimistic about the profitability of mining, especially in April this year, when the price of Bitcoin surged from $20,000 to around $33,000. However, in a interview in mid-May this year, many netizens found that the overall profitability of mining farms was far below the level at the end of last year. In fact, in addition to mainstream GPU mining, mining costs are quite significant because the returns in the mining market have been very good in the past few years.

Why use graphics cards instead of CPUs for mining

In the cryptocurrency industry, graphics card mining involves using a computer for calculations. However, mining and CPU usage are completely different because GPUs require a large amount of electricity to process transactions and perform calculations. The Ethereum network can generate 20,000 transactions per second (approximately 30 minutes). Therefore, mining does not require a large amount of energy expenditure, but rather directly invests in graphics cards to mine cryptocurrencies. At this time, graphics cards can be used to mine tokens, exchange virtual goods, and so on.