Titan’s Mining Guide (TMG) #3 — ASICs vs. GPU mining
You now know what GPU mining is, what components you need, and how to put them all together to build a mining rig. However, there is another popular method to mine Bitcoin using ASICs.This chapter will address these powerful machines and compare them in detail with mining rigs.
What are ASIC miners?
Short for application-specific integrated circuit, ASICs or ASIC miners are professionally built machines for only one purpose: mining cryptocurrency. Specifically made for it, these devices’ efficacy is unparagoned by GPUs or any other mining methods. ASICs use microprocessors, which enables them to reach maximum computing power and lower their energy consumption. They are faster, more efficient, and overall better.
However, that superiority comes with certain limitations. The first one is that, designed for maximum output, ASIC miners can only mine a specific cryptocurrency, making them less adaptable.
Another setback for ASICs is their lack of repurposing capabilities. GPU mining rigs, being modular, are using general-application hardware like graphic cards can do much more than mining. That said, mining rigs keep better value over time, and miners can sell their components whenever they feel to give up mining. We can’t say the same for ASICs, who lose their value much quicker due to new, upgraded machines coming out every year.
There are many points of comparison between the two methods, so let’s dive deeper into each one of them. Hopefully, by the end of this article, you’ll have a better understanding of the pros and cons and will be able to decide which one suits you best.
Hashrate output
Undoubtedly, ASICs are the most potent mining device out there. Equipping yourself with a few ASIC miners will buy you a ticket to the first place of any mining pool’s hashpower contributors ranking.
Despite that, when mining with ASICs, it’s worth mentioning that the only way to level up your operation regarding hashrate is to buy more, making it costly not to lag behind other miners in the long term. GPU mining is more convenient in that sense because you can upgrade components individually, and the costs are generally lower. Not to mention, as we said before, that you could sell your old hardware and reduce your expenditure even more.
Energy consumption and efficiency
Again, ASICs take this one. Being built for this purpose, they’re designed to minimize energy consumption and make the best out of it. At the same time, GPU mining uses general-purpose components that can’t quite achieve that electricity optimization.
Electricity costs are a significant factor when calculating the profitability and costs of your mining operation, which makes ASICs more sustainable in the medium to long term.
Remember, though, that ASIC miners have no repurposing possibilities and that, even as efficient as they are, it takes a long time to recover the initial investment. Make sure you time your purchases accordingly considering mining difficulty, prices, and new machines coming up, rendering old models useless and obsolete.
On the other hand, you wouldn’t have to worry about all that with GPUs. You could sell old hardware to gamers or designers who will find an excellent use for it, even though they’re not state-of-the-art, and upgrade to a new, better alternative.
User-friendliness and accessibility
From the very beginning of the process, which is choosing your hardware, to the point when you start hashing blocks, GPU mining is a much more complicated process than buying a plug-and-play ASIC miner.
Planning, building, and operating a mining rig takes a lot of time and patience that ASIC mining doesn’t. Nonetheless, and as we said before, GPU mining makes up for this in the reselling possibility of its components and the upgrading capabilities.
ASIC miners are easier to acquire, install, and run, but that’s pretty much the extent of it. Beyond that point, whatever you want to do, whether it’s upgrading your equipment, resell it, or switch the coin you’re mining, is going to be a cumbersome process.
It all depends on what you’re looking for. If you want to start mining and forget about everything else, ASIC mining may be for you. If you rather be able to adapt and like to stay on top of your operation, making tweaks and adjustments every time you can, then GPU mining may be worth the trouble.
Flexibility and adaptability
If you’ve been paying attention, you already know this is a no-brainer.
The only way to use “ASICs” and “flexible” in the same sentence is to add “are not” in the middle of it. When you buy an ASIC miner, you’re stuck with it. It sounds harsh to say it like that, but it is. They have no other application, no possible repurposing. As soon as you stop mining, want to upgrade, or, for any reason, don’t want the machine anymore, it becomes a burden.
Contrarily, their adaptability is arguably GPU mining’s most important advantage. Not only for repurposing them for anything besides mining but also to adjust to the ever-changing crypto market conditions. If Bitcoin’s difficulty rises beyond profitability, you can switch to Ethereum or Litecoin with a single click. Not only can flexibility cut losses. It can also increase profits.
Price and costs
This is a tricky subject because neither GPUs nor ASICs are easy to price.
The price of building a mining rig will depend entirely on your choice of components, the hashpower you’re trying to reach, and the more or less sophisticated you want it to be. Some miners even spend a lot more than necessary to make their rigs look good, with colorful lights and fancy frames. It’s up to you. Of course, the more you invest, the better profits you can expect.
Differently, ASIC prices tend to follow Bitcoin’s, although with a little bit of lag. It makes sense. The more Bitcoin is worth, the more wealth ASICs can produce with mining. This doesn’t happen with GPUs because, as we said, they are general-purpose hardware, and supply and demand are affected by lots of other factors besides Bitcoin. In the case of ASICs, being dedicated mining devices, buyers and sellers only respond to Bitcoin.
At the cost of being redundant, we must mention reselling possibilities one more time when talking about price. You can considerably reduce costs by selling old, unused hardware and recover a part of your invested budget, which is a significant point in favor of GPU mining.
Conclusion
Yes, ASICs are more powerful. And yes, they are more efficient too. But also expensive and require a long-term commitment to recover the initial investment. In the meantime, several factors like changing difficulty, new model releases, and Bitcoin price fluctuations, among others, can affect the profitability and sustainability of your operation. Unless you have a big budget to cover these contingencies, ASIC mining may not be worth the risks. That is why it’s often the choice of mining corporations and enterprise-level investors.
Indeed, GPU mining, although less powerful, seems a safer alternative for retail miners. The versatility of mining rigs, along with its components repurposing and reselling possibilities, implies fewer risks. This, in turn, makes up for the higher energy costs and lower hashpower.
Only you know the reality of your situation and the level of risk you’re comfortable with. We hope the points we’ve compared here will help you decide and make your mining journey as pleasant and peaceful as possible.
In the next chapter of the guide, we’ll talk about mining software, how to use it, and how to choose the right one for you. See you then!
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