Graphical Processing Unit (GPU)

Understanding Graphical Processing Units (GPUs)

A Graphical Processing Unit (GPU), a graphics card, is a hardware component widely used for processing computer images and videos.

In addition to its graphical capabilities, GPUs can also be utilized for cryptocurrency mining.

Notably, mining coins often involves a proof-of-work (PoW) consensus mechanism, although popular cryptocurrencies like Bitcoin are predominantly mined using specialized ASICs rather than GPUs.

How GPU Mining Works

GPU mining operates similarly to mining with ASICs for cryptocurrencies like Bitcoin.

Miners are required to solve complex mathematical functions, typically utilizing algorithms such as SHA-256 hash functions.

This process ensures the security of the blockchain and prevents the double-spending of mined coins. Miners who successfully solve the hash are rewarded with mining rewards.

GPU Mining Algorithms

There are several mining algorithms explicitly designed for GPU mining:

  1. SHA-256: This is the most widely used cryptographic hash function, producing a 256-bit signature for text strings. Cryptocurrencies such as Bitcoin (BTC), Bitcoin Cash (BCH), Terracoin (TRC), and Peercoin (PPC) are based on the SHA-256 algorithm.
  2. Scrypt: Introduced as an alternative to SHA-256, Scrypt is a less resource-intensive algorithm that measures its output in kilohashes. Litecoin (LTC) is one of the prominent cryptocurrencies that utilizes the Scrypt algorithm, which also features a faster block generation time of 2.5 minutes.
  3. X11: X11 is an energy-efficient mining algorithm that measures its output in megahashes. Cryptocurrencies like Dash (DASH), StartCoin (START), CannabisCoin (CANN), and XCurrency (XC) employ the X11 algorithm.
  4. Ethash: Ethash was initially the mining algorithm for Ethereum and continues to be utilized by its forks, EthereumPoW and Ethereum Classic.

Cryptocurrencies Suited for GPU Mining

Previously, Ethereum was a popular cryptocurrency for GPU mining.

However, its transition to a proof-of-stake (PoS) consensus mechanism has reduced the demand for GPU mining, leading to a decline in GPU prices.

Currently, the most popular cryptocurrencies to mine with GPUs include:

  • EthereumPoW
  • Ethereum Classic
  • Dash
  • Litecoin

For more information, see our guide on which GPU is best for crypto mining.