Bitcoin Mining: The Engines Behind Generating a Coin

Screen Shot 2018-04-30 at 4.38.23 PM.png

At its core, mining is just solving calculations. In order to achieve this in the fastest possible way, people have experimented with different technologies to be the best.

In the beginning, people would use regular CPUs—Central Processing Units. This is the main brain of your computer. It’s fast, and can do millions – even billions – of calculations per second, so it was used in the beginning


1) they are very linear and can only process one thing at a time. The slight workaround to this is multicore CPUs, they have 2, 4, even 12 cores that allow multiple processes to be handled at once.

2) they are a general purpose computer chip, they have the capabilities to do everything that goes on in your computer. Since they are decent at everything, they are the best at nothing.

Next came the GPUs—more well known as graphics cards. The graphics card in your computer is the specialty chip that controls your display. There are many complicated ways that this could be explained, but basically, a graphics cards needs to process a ton of data, all at once. It needs to organize every pixel on your screen, it needs to update all those pixels many times per second... It has some high demands placed on it. To cope with these demands, GPUs are made with many small CPUs inside of them. This makes them very good at Parallel Processing.  

Computer chips can only handle 1 task at a time, so even if they are super fast, they are stuck in a single lane. However, if you have 1000 small CPUs, even if they are slower than 1 big CPU, you can do 1000 tasks at once.  That’s the idea behind parallel processing.  And with our computers trying to handle so many tasks at once, having multiple lanes to do work in is a big help.  The calculations aren’t very complicated (for a computer, they’re quite complicated to do manually) but many have to be done. Having the ability to delegate these calculation across multiple CPUs within a GPU, allows graphics cards to be many times (10x-100x) more efficient at mining than a CPU.

Screen Shot 2018-04-30 at 8.53.10 PM.png

Processing Beyond GPUs

As the price of Bitcoin grew, more companies were willing to invest money into R&D. GPUs were fast, but they are still general purpose computer chips. 

What if you were to invent a chip that only did the calculations required for Bitcoin mining, and nothing else? 

That’s the idea behind the ASICs- Application Specific Integrated Circuits (ASICs) are computer chips that are developed with a single purpose in mind. This makes them more efficient than anything else at that task, but beyond that, they can’t do much. When the R&D into ASICs first started, they had to use old computer chip technology. The main factor of how fast a computer chip is the amount of transistors inside it. This means the smaller transistors are, the better chips we can make. The first ASICs used ~130nm (nanometer, 1 billionth of a meter) transistors. This was because it was expensive to use cutting edge chip-manufacturing technology, so they started with old transistor manufacturing.  However, very quickly (within 2 years) the investments were made, research advanced and ASICS were made with cutting edge 28nm transistors!

Since then, we’ve advanced to 20, and even 14nm chips. For comparison, the chips inside your phone or laptop are most likely 20, maybe 18nm chips. Brand new CPUs (released 2018) are at 14nm, same as the ASICs. This means that the Bitcoin ASICs are at the cutting edge of current technology.

Now that there are ASICs in the market, how much did that grow the network? It is millions (hundreds of millions) times larger than when it was when GPUs were the main miners. This means that there are many many more calculations going into the network to secure the blockchain. For comparison, if you took the top 500 supercomputers in the world, put them all working together, and had them do the same amount of calculations that have been put into the blockchain, it would take them almost 50 000 years to do the work. This is the power of a proof of work system. 



Now that the ASICs are equal to the cutting edge of current technology, the pace of R&D has slowed (slightly). It requires a bigger investment to not only push ASIC technology up to current limits, but beyond. As the market cap of Bitcoin (and cryptocurrencies as a whole) grows, the technology will continue to be pushed. Even now we are seeing computing giants like AMD and Intel entering the space, and doing some research of their own into mining technology.  For sure, this will push the network to greater heights!