About Cryptocurrency

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How it works


Cryptocurrency is a field of science and economics that has been talked about and quite frankly, beaten to death over the past few years. With using cryptocurrency, of course, there had to be a method to obtain these currencies such as Bitcoin, Litecoin, what have you. This method is called “cryptomining” or “mining” for short. The huge influx in cryptocurrencies, and their outrageous and unpredictable market value has caused an influx in people wanting to mine them and get a piece of the pie for themselves which has led to advancements in these machines that mine them. We have seen CPU based machines, GPU based machines, FPGAs and most recently ASIC machines. We will be taking a look at how efficient some of these machines are at mining crypto.

Executive Summary

Cryptocurrencies are complex algorithms that when are “mined” and the miner is rewarded with a percentage proportional to how effective they solved the algorithm of the particular currency. They are essentially currencies that have no backing like the US Dollar has the US Government’s backing making them very unpredictable and some of them hold quite a high monetary value. The process of mining these coins require the use of hardware to solve these algorithms at a rate called hashrate, the better your machine’s hashrate, the more likely you are to receive a portion of a currency and the higher the portion. There have been huge advancements in the type of machinery used to mine most notably the newest and most efficient miners known as ASIC miners that have numbers that are exponentially better than FPGA and GPU based models.


Cryptocurrency has been around for a number of years, most notably Bitcoin which is the cryptocurrency that has gotten the most publicity. In recent years we have seen the addition of other cryptocurrencies such as litecoin, ethereum, Bitcoin cash, and Dogecoin (yes that is really the name of a cryptocurrency) just to name a few(Telegraph, 2018). One of the most common ways to obtain cryptocurrency (besides buying it with real money) is cryptomining. The methodology for crypto mining has evolved mostly due to the fact that as it has gotten more popular (because people realized they can make a lot of money off of it) it has gotten harder to mine. It has evolved from using CPU based machines to try and accomplish the task, to GPU based machines, to now using FPGA boards and even hardware made specifically for cryptomining such as ASIC miners. I will be taking a look at how efficiently these different machines and miners are able to solve or crack the algorithms that correspond with specific cryptocurrencies. In order to fully understand how efficiently these miners work, we must also have a general understanding of what cryptocurrency is, and how it is “mined”.

What is cryptocurrency

Cryptocurrency is, in simplest terms, a form of currency that has no tangible amount backing it up. For example, the US Dollar gets its value backed by the US government. Cryptocurrencies have no such value, and thus, has had a trend of fluctuating in value and makes it extremely difficult for economic experts to give an exact dollar value to it when trading. In more scientific terms, cryptocurrency is essentially a form of cryptography, or a mathematical “problem” that needs to be solved. In order to “mine” these cryptocurrencies, one essentially has to use a combination of hardware and software to compute and solve these hash block algorithms. Each cryptocurrency has its own unique algorithm, this is a factor at how efficient a machine can mine, as well as the hardware used in the miner. Bitcoin’s algorithm that needs to be solved, for example, is a 256 bit number that when worked on or “mined” successfully would result in receiving an award. Hashrate is the term at which a miner solves hash algorithms and is measured in hashes per second (h/s). For bitcoin, Each hash is basically a random number between 0 and the maximum value of a 256-bit number. If the hash is below the target, then a reward is won. If not, the client will increment the number added to the block (completely changing the hash) and tries again. (Serapiglia, 46). This means that hardware which excels at doing very repetitive, simple tasks, like graphics cards, would be more efficient at mining than say a cpu, which excels at solving less repetitive, more complex tasks. Even better than GPU based machines, are machines that are made specifically to mine a specific Cryptocurrency such as ASIC miners.

GPU Based mining machines

A graphics card based miner is useful because algorithms such as Bitcoin’s SHA-256 algorithm, are “simple computations” in the sense that it is the same process over and over again until you hit a “winning number” as previously mentioned. Graphics cards excel and are made specifically to output the same, or very similar images over and over again, with the introduction of technologies such as CUDA from Nvidia, one can program a video card using C or Python in order to use them to computer mathematical algorithms. This allowed graphics cards to improve performances by using matrices to determine 3D visuals and more effectively calculate when to output what. This same technology is useful as it can be tweaked in order to solve hashes and in turn “mine” cryptocurrencies. One problem that arises when working with larger datasets is the need for more hardware. This means that Graphics cards have more parallel working units, which means many more transistors that need to work per each instruction. With more hardware comes more energy use and more heat dissipation and of course makes the architecture larger in comparison to a CPU. (Serapiglia, 47). However, their technology makes them much more efficient than CPUs when asked to work on large, simple datasets as mentioned previously. The introduction of GPU based mining rigs had seen an increase in the collective hashrate from 7 mh/s to upwards of 1.7 ph/s (Serapiglia).

Open Source FPGA miners

FPGA miners have become more popular recently as they are very efficient and can be programmed to solely focus all of their hardware on solving these cryptocurrency algorithms. This is something where graphics cards lack as they are really meant to perform other operations as well. This is also very important as unlike most other mining machines, FPGA miners can be reprogrammed and implemented to solve other algorithms and potentially mine multiple cryptocurrencies (Dotemoto, 32). On top of this, they also take up a smaller footprint and require less power and less hardware to accomplish the task efficiently. There are many different types of FPGA boards and they come with varying hardware and power consumption ratings. FPGA Guide compares one of their top of the line FPGA boards, the Xilinx BCU1525 with the Nvidia GTX 1080 ti graphics card, which is one of the flagship graphics cards available for cryptomining. They show the FPGA trumping the 1080ti in multiple algorithms: Keccak-ZP, Keccak, and Lyra2z. The FPGA produces hashrates of 12.6 gh/s, 40 mh/s, and 12.6 gh/s on each of these algorithms respectively, while the gpu performs at 1.26 gh/s 3.8 mh/s and 1.24 gh/s all with around the same power dissipation of around 200-250 watts (FPGA Guide). This shows that FPGAs are superior to GPU systems and are very efficient in solving algorithms for crypto mining. Companies like Butterfly Labs had gotten creative and developed machines that were basically utilizing multiple (in Butterfly Labs case – 16) FPGAs all for the singular purpose of solving algorithms. Their Jalapenos were rated at 4.5 gh/s, which were their cheapest and smallest miner at $149 usd. While their next step up, the $1299 SC Singles, were rated at 60 gh/s. Finally, the unrealistic, $30,000 SC MiniRigs were rated at 1,500 gh/s (Taylor, 7). Obviously with this amount of hardware, the power and heat dissipation is outrageous. Taylor mentions that one MiniRig was composed of 16 spartan-6 FPGAs and the power output of one of the MiniRigs is approximately 2500-2700 watts. That is considerably more than any other method mentioned so far, but it is proportional to the hashrates the machine offered. Machines like the MiniRig while producing otherworldly hashrates, were not necessarily efficient because of the expense, and power that it cost to run them.

ASIC miners

ASIC miners are machines that are made solely for the purpose of computing these algorithms and mining cryptocurrencies. There are many companies such as ASICMiner, Avalon, and AntMiner to name a few. ASIC stands for Application Specific Integrated Circuits. In the case of cryptomining they are chips that are implemented onto a motherboard and power supply all specifically optimized for certain algorithms that correspond with certain cryptocurrencies (Martindale). There are many different types of ASIC miners each varying in size and power. The EBIT E10 is currently one of the most efficient hashrate ASIC miners coming in at a soaring 18,000 gh/s with a power output of 1620 watts. Comparing this to the Butterfly MiniRig above, we can see even though the power is still high (much lower than the Butterfly MiniRig) it is still very efficient due to the hsah rate. Also the price is much more reasonable coming in at $5230 (Bitcoin Wiki). The downside to this is most ASIC miners cannot be reprogrammed or modified to solve different algorithms like FPGA based mining machines do, meaning if you wanted to try and mine other cryptocurrencies, you would have to purchase a new ASIC miner. That being said, they are the most efficient miners that are currently available to consumers and seem to be getting more popular as time goes on.


There are many different machines that have been tried and tested when it comes to cryptomining. GPU based machines were once the most efficient as they provided the only real alternative to CPU based machines and were much better at performing the repetitive task of solving algorithms. However, as time went on FPGA based miners became popular because they can be reprogrammed to solve different hashing algorithms and in turn could be used for multiple cryptocurrencies. As well as the fact that they let out less power and took up a much smaller footprint, made them much better for the average consumer. The future seems to be pointing towards these ASIC miners that have hashrates that are not comparable to any other method, as long as you are willing to spend the money and are able to power them as they take a considerable amount of power. One thing is for certain, it is very interesting to see how far these cryptocurrencies will go and how important they become to our society and if there will be a need for these miners to come up with new methods and machines to obtain them.


[1] “What are the top 10 cryptocurrencies?,” The Telegraph, 18-May-2018. [Online]. Available:


[2] Serapiglia, A., Serapiglia, C. P., McIntyre, J. (2015). “Crypto Currencies: Core Information

Technology and Information System Fundamentals Enabling Currency Without Borders.” Information Systems Education Journal, 13(3) pp 43-52. http://isedj.org/2015-13/ ISSN: 1545-679X.

[3] Dotemoto, P. (2014). “FPGA Based Bitcoin Mining.” pp 1-46. https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1285&context=eesp.

[4] “FPGA Guide,” The FPGA Mining Guide. [Online]. Available: https://fpga.guide/en/ .

[5] Taylor, M. (2013). “Bitcoin and The Age of Bespoke Silicon” pp 1-10. http://delivery.acm.org/10.1145/2560000/2555745/a16-taylor.pdf?ip= .

[6] J. Martindale, “Bitcoin is collected through ASIC miners. Here’s what it is and why it matters,” Digital Trends, 12-Apr-2018. [Online]. Available: https://www.digitaltrends.com/computing/what-is-an-asic-miner/.

[7] “Mining hardware comparison,” B-money – Bitcoin Wiki. [Online]. Available: https://en.bitcoin.it/wiki/Mining_hardware_comparison#cite_note-AntMinerS9-9.

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About Cryptocurrency. (2019, Feb 05). Retrieved from https://papersowl.com/examples/about-cryptocurrency/

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