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A quick search of mining forums and you can see that these concerns really became an issue in 2013 when CPU (Central Processing Unit) miners were superseded by GPU (Graphic Processing Units) mining rigs and then later eclipsed by ASIC (Application Specific Integrated Circuit) models. Manufacturers are reaping huge bounties from these products. Hence, the continued development of more powerful mining equipment.
What is Mining?
Mining is the process in which a network computer (node) adds the next block to the blockchain after completing a difficult math equation known as the Proof-of-Work. In the early stages of mining, this could be accomplished with nothing more than your home PC’s CPU.
Bitcoin Mining Rig
Increased Difficulty
Part of the proof-of-work algorithm is a difficulty adjustment. As more computing resources enter the mining pool, the proof-of-work algorithm makes the mining math problem more difficult to solve. In 2016, the mining sector saw an explosion in both the value of cryptocurrencies and the difficulty of mining. Up until this time, the majority of mining was still GPU-based but the introduction of far more efficient ASIC mining rigs quickly made mining BTC an expensive endeavor to begin.GPU Life Expectancy – Bitcoin Mining Hardware
The chart below indicates just how quickly GPU Bitcoin mining hardware has suffered since the introduction of ASIC rigs. In 2011, an average GPU miner could expect anywhere from 100-200 BTC for their efforts. Only one year later, these results were reduced to around 30 BTC and by 2013, you would have been lucky to mine 3 BTC using this hardware. This data reveals that by 2014, the number of BTC you could expect to mine using a GPU dropped below 1 BTC; making GPU miners practically obsolete when used alone.
Chart Showing GPU Difficulty Over Time
Delivery Date of Your Equipment
Due to the overwhelming demand for BTC mining hardware, there is now a wait associated with purchasing these products. ASIC miners can have waiting periods that can extend for months. It is important to consider difficulty fluctuations during this time. Basically, if you have to wait too long for your mining equipment, it may not be worth it by the time it arrives.Electricity Costs
Electricity costs should be one of your main concerns when deciding on what type of mining rig to purchase. You may find that you are losing money if you go with a high-powered mining rig in an area where electricity is expensive. Today’s mining equipment is focused on efficiency as older mining rigs are unable to produce a profit in today’s difficult mining ecosystem.
Bitcoin Energy Consuption Chart via CNBC
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