Coinr: Modern Bitcoin Mining

The popularity of bitcoin has skyrocketed, and many people have added their computing power into sustaining the network, to earn money and also support the economy of bitcoin itself.

This blog is about earning coin, so I'll be giving a general idea of how mining is done these days, with a slight touch on past methods and categorized by hardware.

CPU - Central Processing Unit, the processor(s) at the heart of computers.

With the present difficulty rates because of popularity, GPU mining, and the advent of specialized hardware, CPU mining bitcoin is pointless. I mean it, don't even bother learning about it unless you are interested in other digital currencies. GPU mining is coming close to that - unless of course you mine cooperatively.

GPU - Graphics Processing Unit, specialized processors intended for graphics. They are more highly parallelized and are therefore better than CPUs for bitcoin mining. More info.

This brings me to the distinction between solo mining and mining with a pool. Basically, if you mine solo with a single GPU, you will be waiting years and years and may never solve a block at all.

Even with a rig of several linked GPUs costing total in the several thousands of dollars, if you're mining solo, the payday may take quite a while; 114 days on average at 2.1 Gh/s with the best example on the page linked under rig. That's in a world where your cards don't burn out, nothing else breaks, and you keep it running 24/7.

A serious GPU rig.

Mining in a pool solves these problems largely, it allows for cooperative mining whereby the entire group works to solve blocks, and divides up the shares based in some way on the work done. This makes it still fairly possible to make a profit mining bitcoin with GPU rigs. Continuing with the best example from the rigs page, on average 6.62 BTC per month, ~$312 currently. This is ok, minus power you might even still pay off the initial cost, but there are better ways.

An FPGA rig.

FPGA - Field Programmable Gate Array, programmable integrated circuits which can be programmed for specific tasks. Far more efficient than GPUs.

FPGA based mining hardware is really on it's way out, though many units I'm sure are still in trusty operation. Their main advantage is greater efficiency; they consume much less power per hashing operation than GPUs. A single chip model would not offer more power than a high-end GPU, but the general application is combining chips into arrays.

At the upper end of this spectrum would be the ButterFly Labs Mini Rig (no longer in production) which is more than ten times as powerful as the 3x AMD 6990 GPU rig ( >25 Gh/s claimed) and actually uses less power, the only catch - it cost over $15,000. Like I said, serious business. Despite the power, mining in a pool is really still the only way to go with these.

An Avalon ASIC miner. Owned by and photo credit Jeff Garzik.

ASIC - Application Specific Integrated Circuit, a chip designed explicitly for one purpose, the relevant purpose of course being bitcoin mining.

This is really the future of bitcoin mining. They basically blow everything else out of the water. While very expensive for the most powerful arrayed units, some should eventually actually be within the reach of the average miner.

Avalon was the first company able to deliver on their promise of this latest generation hardware, essentially outstripping the competition. They are only releasing their units in small batches (300 "released", 600 in the next batch) and if you haven't ordered one already, you cannot at this time. The first batch went for $1500 each, and is claimed to be thirty times more powerful than our best example rig at >65 Gh/s, and use less than half the electricity. There are only four or five confirmed Avalon ASIC rigs in the wild.

Butterfly Labs is really the only other competition to Avalon at this point in time, and they have been plagued by delays to such a degree that many have suggested (and outright accused) that their products are vaporware.

Butterfly Labs ASIC line.

Originally Butterfly Labs announced that they would ship their first units sometime in the last quarter of 2012, but have not yet shipped as of the date of this post, 16th March 2013. This general issue plagued them with their earlier FPGA line as well, but eventually they did deliver on their orders. Check their site for the various models they have for pre-order, but they range from $150 for the "Jalapeño" model which they claim capable of 4.5 Gh/s, up to the "Bitforce Mini Rig SC" costing ~$30,000 and claiming a whopping 1,500 Gh/s.

If it were possible to plug a Mini Rig in today, you would be pulling in the coin, and probably make somewhere around 155 BTC/day, ~$7,313. This is not how it will happen, however, as when these ASICs arrive, you will not be the only one running them.

Before you jump the gun and say "Oh boy, make-rich boxes" and start throwing money at your monitor, be sure to read my post The ASIC Window.

This is really only a cursory look into the hardware and methods used in modern bitcoin mining, for more info check the links from this page which i'll distill down a bit: