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— CH. 1 · THE HASHING ENGINE —

GPU mining

~2 min read · Ch. 1 of 5
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  • Graphics Processing Units calculate cryptographic hashes to verify transactions on a decentralized ledger. Miners receive rewards for performing this computationally intensive work. GPUs proved especially performant at calculating these specific hashes compared to other hardware. Early cryptocurrency systems relied on central processing units to mine coins in their earliest days. These processors were gradually replaced by more performant graphics cards as the technology evolved.

  • The first public implementation of Bitcoin arrived in early 2009 without GPU mining capabilities. Graphics Processing Unit mining devices emerged in October 2010 through new software configurations. June 2017 marked a turning point when Hong-Kong based Sapphire Technology produced GPUs tailored specifically for mining tasks. Many of these specialized units lacked display functions and could only be used for mining operations. This shift created dedicated rigs that incorporated multiple GPUs working together to maximize output.

  • Statistics suggested that 67% of electricity powering Bitcoin mining during 2020 and 2021 came from fossil energy sources. Bitcoin mining produced more than 85 million tons of CO2 during that same period. Cyber criminals began hacking into computers to perform small mining tasks in the background. Hackers typically limit the amount of GPU power by 75% to stay undetected while using a small portion for cryptocurrency extraction. This malicious activity targets consumer devices to generate unauthorized revenue streams.

  • Cryptocurrency miners increased their purchases of GPUs between 2013 and 2017 causing prices to skyrocket worldwide. A report by Bloomberg suggested that cryptocurrency miners spent $15 billion on GPUs during the mining craze since 2021. The increasing demand caused a shortage that continued until production finally caught up in 2023. Prices stabilized as the market adjusted to new conditions following the end of the boom cycle. Global supply chains struggled to meet the sudden surge in hardware requirements.

  • Ethereum finished its transition from the traditional Proof of Work algorithm to a Proof of Stake algorithm in September 2022. This change significantly reduced computational costs and made it economically infeasible to use GPUs to mine Ethereum. Miners began dumping their graphics cards onto the second-hand market immediately after the transition. Some GPU miners switched to other Proof of Work coins like Ethereum Classic though these alternatives remained unprofitable. Mining companies started refactoring systems to house AI computation in early January 2023.

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Common questions

When did GPU mining of cryptocurrencies begin?

Graphics Processing Unit mining devices emerged in October 2010 through new software configurations. Early cryptocurrency systems relied on central processing units to mine coins in their earliest days before this shift occurred.

What percentage of Bitcoin mining electricity came from fossil energy sources during 2020 and 2021?

Statistics suggested that 67% of electricity powering Bitcoin mining during 2020 and 2021 came from fossil energy sources. This activity produced more than 85 million tons of CO2 during that same period.

How much money did cryptocurrency miners spend on GPUs since 2021 according to Bloomberg?

A report by Bloomberg suggested that cryptocurrency miners spent $15 billion on GPUs during the mining craze since 2021. The increasing demand caused a shortage that continued until production finally caught up in 2023.

When did Ethereum finish its transition from Proof of Work to Proof of Stake?

Ethereum finished its transition from the traditional Proof of Work algorithm to a Proof of Stake algorithm in September 2022. This change significantly reduced computational costs and made it economically infeasible to use GPUs to mine Ethereum.

Why do hackers limit GPU power to 75 percent when stealing computing resources?

Hackers typically limit the amount of GPU power by 75% to stay undetected while using a small portion for cryptocurrency extraction. This malicious activity targets consumer devices to generate unauthorized revenue streams.

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All sources

20 references cited across the entry

  1. 1webGPU mining 101: a short guide on crypto-mining using graphics cardsChristopher McFadden — 2023-03-13
  2. 2journalA Novel Optimization for GPU Mining Using Overclocking and UndervoltingMohammed Shuaib et al. — January 2022
  3. 3webCrypto Miners, Not Gamers, Were The Primary Buyers of Graphics Cards Since 2021, Almost $15 Billion Worth of GPU Sales ReportedHassan Mujtaba — 2022-06-19
  4. 4journalThe Environmental Footprint of Bitcoin Mining Across the Globe: Call for Urgent ActionSanaz Chamanara et al. — 24 October 2023
  5. 5webWindows cryptomining attacks target graphic designer's high-powered GPUs
  6. 6webCyber-criminals Exploit GPUs in Graphic Design SoftwareAlessandro Mascellino — 2023-09-08
  7. 7webThe GPU shortage is over, but it's still wreaking havoc2023-12-20
  8. 8webThe War Between Gamers And Cryptominers—And The Scarce Global Resource That Sparked ItAbram Brown
  9. 9newsOh great, crypto miners are selling repainted GPUs and passing them off as newJorge Jimenez — 2023-01-26
  10. 10newsUnderstanding Bitcoin Halving: A key event for Bitcoin investorsNavdeep Singh — 2024-02-19
  11. 11webGraphics Card Power Consumption and Efficiency TestedJarred Walton — 2021-04-05
  12. 12webRenewable Sources and How They Helping the Crypto Mining Industry
  13. 13journalThe Evolution of Bitcoin HardwareMichael Bedford Taylor — 2017
  14. 14newsSapphire is first to market with graphics cards specific for miningPaul Lilly — 2017-06-26
  15. 15webCryptocurrency Craze Sends GPU Prices Skyrocketing -- AgainHruska Joel — 22 June 2017
  16. 16webBitcoin mining is worse for the environment now since China banned it2022-02-26
  17. 17webIs bitcoin going to crash again?Josh Kirby
  18. 18webGPU Mining for Ethereum Ends as 'The Merge' Completes2022-09-15
  19. 19webReasons to be cheerful: 'GPU mining is dead less than 24 hours after the merge'Szewczyk, Chris — Future Publishing Limited — 2022-09-16
  20. 20webThe 2024 Shift: How Cryptocurrency Mining Companies Are Adapting to AI Computation.