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why GPUs are sought before CPUs

The current cryptocurrency mining bubble, especially the one related to Ethereum, has meant that graphics cards have not only disappeared from stores, but the price of these has almost doubled. But why are GPUs so sought after by miners?

What is cryptocurrency mining based on?

The reason why the concept of mining is used is because it is based on deciphering a key where it is increasingly difficult to do so. So the cost of decoding the next unit is always higher than the previous one. All this emulates the exploration of minerals where it is increasingly difficult to find new units and the added cost of the new minerals extracted affects the price of those already previously extracted, increasing it.

Due to the growing difficulty when mining, cryptocurrency mining farms have to renew their fleets of graphics cards. Not only due to wear but also due to the fact that the new architectures are more energy efficient than the previous ones, reducing costs when executing the mining algorithms.

In any case, the increase in the cost of mining must be differentiated from the demand in price of the different cryptocurrencies in the market, which does not start exclusively from costs but also from supply and demand.

GPU architecture is ideal for mining


When cryptocurrency mining began at the end of the 2000s, it was not using graphics cards but conventional CPUs. However, the increased difficulty of mining meant that the execution capacity of the CPUs more thought for executing serial code began to make them the less suitable hardware for mining.

GPUs have the ability to compute thousands of data in parallel, thanks to their extensive SIMD units in combination with their dozens of shader units. So not only can they be mining different parts of the blockchain of each cryptocurrency in parallel, but they can also apply different algorithms and parts collaboratively.

The algorithms are applied through Compute Shader programs, which are shader programs that do not run in the 3D pipeline used to render graphics, and are rather used in other fields. In which the enormous power of the GPU is used to solve data problems in parallel. And one of these fields is cryptocurrency mining.

GPUs are cheaper to scale than a CPU

GPU mining

Having a CPU with a large number of cores that is designed to work in tandem and without associated latencies can cost us a high price, since for them server CPUs are necessary with the high cost that this entails. On the other hand, graphics cards, although when rendering they cannot work in parallel, they can do so in other applications and this allows to build many GPUs working in parallel at the cost of a CPU for servers.

A mining farm can take several graphics cards with high-end GPUs for mining, but also low and mid-end GPUs, and combine them with each other in parallel for great performance when decoding. That is why not only high-end graphics cards are sought after by miners, but the rest of the ranges.

Are we going to see a third mining bubble?

GPU mining

We cannot assure it, but cryptocurrencies with longer life than Ethereum have left the GPUs to be based on ASICs, fixed function units or accelerators that are designed for a single type of cryptocurrency and algorithm that lose flexibility in exchange for increasing a lot in efficiency with respect to energy consumption and cost. So cryptocurrency mining reached a point will leave conventional GPUs as they stopped using CPUs in their day.