GPU mining

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GPU mining is the use of Graphics Processing Units (GPUs) to "mine" proof-of-work cryptocurrencies, such as Bitcoin. [1] Miners receive rewards for performing computationally intensive work, such as calculating hashes, that amend and verify transactions on an open and decentralized ledger. GPUs can be especially performant at calculating such hashes.

Contents

Concerns about GPU mining

With the rise of GPU mining for cryptocurrency, there sparked various discussions on the concerns with the usage GPU's for cryptocurrencies for the hardware market, environment, and users.

Environmental concerns

While central processing units (CPUs) were used to mine cryptocurrency in their earliest days, they were gradually replaced by more performant GPUs. [2] Even so, GPU mining consumes significant amounts of energy to perform their tasks. Unlike gaming PCs, GPU mining rigs usually incorporate multiple GPUs working together, and some miners may use multiple GPU mining rigs. A report by Bloomberg suggested that cryptocurrency miners spent $15 billion on GPUs during the cryptocurrency mining craze since 2021. [3] Meanwhile, statistics suggested that 67% of the electricity powering Bitcoin mining during 2020 and 2021 was generated by fossil energy and that Bitcoin mining produced more than 85.89 metric tons of CO2 during that period. [4]

Security concerns

Due to the increased demand of GPU mining for cryptocurrency, Cyber criminals have taken interest in hacking into other users' computers with more powerful GPU's to perform small mining tasks. With the use of one of Window's feature called 'Advanced Installer', the hacker gains access to the host's computer where they download installers that will perform a two step process. The first step is scripting a recurring task to decrypt the payload, and the second is enabling crypto miners to profit out of the user's computers. Typically, hackers will perform cryptocurrency mining in the background by limiting the amount of GPU power by 75% allow small yet ample amount of GPU power used for cryptocurrency mining while being undetected. [5] [6]

Market impact

As cryptocurrency miners increased their purchases of GPUs between 2013 and 2017, the prices of GPUs skyrocketed. [7] The increasing demand of GPU mining and purchases caused a worldwide shortage that continued into 2021 until production finally caught up in 2023, [8] [9] With mining firms going bankrupt, increase regulations enforced, and the main cryptocurrencies switching to a "proof of stake" algorithm, the GPU mining for cryptocurrency became highly inefficient to continue sustaining. Resulting in many used GPU's for mining being sold or refurbished back onto the market, stabilizing the market to something similar to the pre-GPU mining boom. [10]

Profitability

The profit of GPU mining depends on many factors. The first is the amount of cryptocurrency rewards that can be acquired. Take Bitcoin as an example. Its system is pre-programmed to halve the Bitcoin rewards offered every four years or after every 210,000 blocks mined. [11] While the original block reward was 50 bitcoins per block, it has decreased to 6.25 bitcoins every block in May 2020. [11] A second would be the computational power of a GPU, different GPU's hold different computational power that might be more advantageous for the miner to prioritize. With each new generation housing better chips equipped with increased clocked processing speeds, hashrates, and lower power usage. [12] Similarly, the cost of electricity to house the GPU miners can factor the profitability as various areas price electricity differently and different options are available like fossil fuels or renewable energy. [13]

History

Related Research Articles

Proof of work (PoW) is a form of cryptographic proof in which one party proves to others that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with minimal effort on their part. The concept was invented by Moni Naor and Cynthia Dwork in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels. The concept was adapted to digital tokens by Hal Finney in 2004 through the idea of "reusable proof of work" using the 160-bit secure hash algorithm 1 (SHA-1).

Double-spending is the unauthorized production and spending of money, either digital or conventional. It represents a monetary design problem: a good money is verifiably scarce, and where a unit of value can be spent more than once, the monetary property of scarcity is challenged. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. Like all increasingly abundant resources, this devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency.

<span class="mw-page-title-main">Cryptocurrency</span> Digital currency not reliant on a central authority

A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It has, from a financial point of view, grown to be its own asset class. However, on the contrary to other asset classes like equities or commodities, sectors have not been officially defined as of yet, though abstract versions of them exist.

Litecoin is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was among the earliest altcoins, starting in October 2011. In technical details, the Litecoin main chain shares a slightly modified Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees, faster transaction confirmations, and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold." In 2022, Litecoin added optional privacy features via soft fork through the MWEB upgrade.

<span class="mw-page-title-main">Bitcoin protocol</span> Rules that govern the functioning of Bitcoin

The Bitcoin protocol is the set of rules that govern the functioning of Bitcoin. Its key components and principles are: a peer-to-peer decentralized network with no central oversight; the blockchain technology, a public ledger that records all Bitcoin transactions; mining and proof of work, the process to create new bitcoins and verify transactions; and cryptographic security.

Proof-of-stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. This is done to avoid the computational cost of proof-of-work (POW) schemes. The first functioning use of PoS for cryptocurrency was Peercoin in 2012, although the scheme, on the surface, still resembled a POW.

<span class="mw-page-title-main">Ethereum</span> Open-source blockchain computing platform

Ethereum is a decentralized blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software.

A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization managed in whole or in part by decentralized computer program, with voting and finances handled through a blockchain. In general terms, DAOs are member-owned communities without centralized leadership. The precise legal status of this type of business organization is unclear.

Vertcoin is an open-source cryptocurrency created in early 2014, that focuses on decentralization. Vertcoin uses a proof-of-work mechanism to issue new coins and incentivize miners to secure the network and validate transactions. Vertcoin is designed to be mined via graphics cards instead of through ASICs.

Monero is a cryptocurrency which uses a blockchain with privacy-enhancing technologies to obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading Monero, transaction amounts, address balances, or transaction histories.

A decentralised application is an application that can operate autonomously, typically through the use of smart contracts, that run on a decentralized computing, blockchain or other distributed ledger system. Like traditional applications, DApps provide some function or utility to its users. However, unlike traditional applications, DApps operate without human intervention and are not owned by any one entity, rather DApps distribute tokens that represent ownership. These tokens are distributed according to a programmed algorithm to the users of the system, diluting ownership and control of the DApp. Without any one entity controlling the system, the application is therefore decentralised.

<span class="mw-page-title-main">Ethereum Classic</span> Blockchain computing platform

Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).

<span class="mw-page-title-main">Firo (cryptocurrency)</span> Cryptocurrency

Firo, formerly known as Zcoin, is a cryptocurrency aimed at using cryptography to provide better privacy for its users compared to other cryptocurrencies such as Bitcoin.

<span class="mw-page-title-main">Cardano (blockchain platform)</span> Public blockchain platform

Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA.

A cryptocurrency wallet is a device, physical medium, program or an online service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction, identification, or legally signing a 'document'.

Cryptocurrency and crime describe notable examples of cybercrime related to theft of cryptocurrencies and some methods or security vulnerabilities commonly exploited. Cryptojacking is a form of cybercrime specific to cryptocurrencies that have been used on websites to hijack a victim's resources and use them for hashing and mining cryptocurrency.

In cryptography, a memory-hard function (MHF) is a function that costs a significant amount of memory to efficiently evaluate. It differs from a memory-bound function, which incurs cost by slowing down computation through memory latency. MHFs have found use in key stretching and proof of work as their increased memory requirements significantly reduce the computational efficiency advantage of custom hardware over general-purpose hardware compared to non-MHFs.

Cryptojacking is the act of exploiting a computer to mine cryptocurrencies, often through websites, against the user's will or while the user is unaware. One notable piece of software used for cryptojacking was Coinhive, which was used in over two-thirds of cryptojacks before its March 2019 shutdown. The cryptocurrencies mined the most often are privacy coins—coins with hidden transaction histories—such as Monero and Zcash.

<span class="mw-page-title-main">Environmental impact of bitcoin</span>

The environmental impact of bitcoin is significant. Bitcoin mining, the process by which bitcoins are created and transactions are finalized, is energy-consuming and results in carbon emissions, as about half of the electricity used is generated through fossil fuels. Moreover, bitcoins are mined on specialized computer hardware with a short lifespan, resulting in electronic waste. The amount of e-waste generated by bitcoin mining is comparable to that generated by the Netherlands. Scholars argue that bitcoin mining could support renewable energy development by utilizing surplus electricity from wind and solar. Bitcoin's environmental impact has attracted the attention of regulators, leading to incentives or restrictions in various jurisdictions.

The proof-of-work distributed computing schemes, including Bitcoin, frequently use cryptographic hashes as a proof-of-work algorithm. Hashrate is a measure of the total computational power of all participating nodes expressed in units of hash calculations per second. The hash/second units are small, so usually multiples are used, for large networks the preferred unit is terahash, for example, in 2023 the Bitcoin hashrate was about 300,000,000 terahashes per second.

References

  1. ↑ McFadden, Christopher (2023-03-13). "GPU mining 101: a short guide on crypto-mining using graphics cards". interestingengineering.com. Retrieved 2024-01-29.
  2. ↑ Shuaib, Mohammed; Badotra, Sumit; Khalid, Muhammad Irfan; Algarni, Abeer D.; Ullah, Syed Sajid; Bourouis, Sami; Iqbal, Jawaid; Bharany, Salil; Gundaboina, Lokesh (January 2022). "A Novel Optimization for GPU Mining Using Overclocking and Undervolting". Sustainability. 14 (14): 8708. doi: 10.3390/su14148708 . hdl: 11250/3029400 . ISSN   2071-1050.
  3. ↑ Mujtaba, Hassan (2022-06-19). "Crypto Miners, Not Gamers, Were The Primary Buyers of Graphics Cards Since 2021, Almost $15 Billion Worth of GPU Sales Reported". Wccftech. Retrieved 2024-02-20.
  4. ↑ Chamanara, Sanaz; Ghaffarizadeh, S. Arman; Madani, Kaveh (24 October 2023). "The Environmental Footprint of Bitcoin Mining Across the Globe: Call for Urgent Action". Earth's Future. 11 (10). doi: 10.1029/2023EF003871 . ISSN   2328-4277.
  5. ↑ "Windows cryptomining attacks target graphic designer's high-powered GPUs". BleepingComputer. Retrieved 2024-03-02.
  6. ↑ Mascellino, Alessandro (2023-09-08). "Cyber-criminals Exploit GPUs in Graphic Design Software". Infosecurity Magazine. Retrieved 2024-03-02.
  7. 1 2 Joel, Hruska. "Cryptocurrency Craze Sends GPU Prices Skyrocketing -- Again". Extremetech.
  8. ↑ "The GPU shortage is over, but it's still wreaking havoc". Digital Trends. 2023-12-20. Retrieved 2024-02-20.
  9. ↑ Brown, Abram. "The War Between Gamers And Cryptominers—And The Scarce Global Resource That Sparked It". Forbes. Retrieved 2024-02-20.
  10. ↑ Jorge Jimenez (2023-01-26). "Oh great, crypto miners are selling repainted GPUs and passing them off as new". PC Gamer. Retrieved 2024-02-20.
  11. 1 2 Singh, Navdeep (2024-02-19). "Understanding Bitcoin Halving: A key event for Bitcoin investors". The Economic Times. ISSN   0013-0389 . Retrieved 2024-02-20.
  12. ↑ Jarred Walton (2021-04-05). "Graphics Card Power Consumption and Efficiency Tested". Tom's Hardware. Retrieved 2024-04-03.
  13. ↑ "Renewable Sources and How They Helping the Crypto Mining Industry". Prismecs. Retrieved 2024-04-03.
  14. ↑ Bedford Taylor, Michael (2017). "The Evolution of Bitcoin Hardware". Computer. 50 (9): 58–66. doi:10.1109/MC.2017.3571056. ISSN   0018-9162.
  15. ↑ Paul Lilly (2017-06-26). "Sapphire is first to market with graphics cards specific for mining". PC Gamer. Retrieved 2024-02-20.
  16. ↑ "Bitcoin mining is worse for the environment now since China banned it". euronews. 2022-02-26. Retrieved 2024-01-29.
  17. ↑ Smith, Josh Kirby, Hannah. "Is bitcoin going to crash again?". Times Money Mentor. Retrieved 2024-03-02.{{cite web}}: CS1 maint: multiple names: authors list (link)
  18. ↑ "GPU Mining for Ethereum Ends as 'The Merge' Completes". PCMag Australia. 2022-09-15. Retrieved 2024-01-29.
  19. ↑ "The 2024 Shift: How Cryptocurrency Mining Companies Are Adapting to AI Computation". ZhenChainMicro. Retrieved 2024-08-12.
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