Whether you’re looking to buy a GPU for Bitcoin mining for the first time, or simply want to upgrade your current mining rig, then here’s everything you need to look out for.
Buying a GPU for mining requires a bit of thought. As a general rule, you’ll want the most power given a fixed energy usage. A lower energy consumption means cheaper running costs and therefore more profit. You should also need to consider the type of mining algorithm. dedicated ASIC miners are often far more efficient at mining on certain blockchains than a comparable GPU.
This article focuses on Bitcoin mining, but you could easily adapt these tips to numerous other blockchains and cryptocurrencies.
Mining Hash Rates Explained
In order to assess a GPU’s ability to mine Bitcoin, you need to understand hash rates. When mining Bitcoin or any other Proof of Work (PoW) blockchain, your GPU has to perform complex calculations. These calculations are known as hashes. A hash rate is simply a metric to measure the number of hashes a GPU (or any other processor) can complete in a window of time, often one second. A higher hash rate does not increase your chances of discovering a new block, but you will get through more hashes, therefore increasing your potential chances.
If your GPU can only manage a rather pathetic 100 hashes a second, this is written as 100 H/s. A hash rate this low is not worth bothering with, so this is where the metric international system of units come into play. 1000 hashes are written as a Kilohash KH/s. 1000 Kilohashes make a Megahash MH/s. 1000 Megahashes make a Gigahash GH/s. You can keep going up to peta or exa hash levels, or even further, but this doesn’t often make sense, as no GPU is that powerful yet.
A less common hash rate metric is hash per joule. written as hash/joule (H/j), this specifies how many hashes a GPU can produce while consuming 1 joule of energy. This can be helpful when comparing GPUs. If two GPUs have the same hash rate, the more efficient model will nearly always be a better choice.
The final metric is the hash/second/dollar. Written as H/s/$, this does not factor in running costs. It simply pairs the hash rate with the dollar purchasing price. This indicates the value for money aspect of purchasing a specialist GPU. Ideally, this number should be as high as possible.
You should aim to purchase a GPU that can produce the greatest hashes per second, per joule, and per second/dollar. However, it’s not always realistic to find a super powerful yet energy efficient and affordable GPU.
A GPU with an excellent hash per second per dollar and per joule will be very good at reducing electricity costs and may be reasonable to purchase to begin with, but don’t forget about the hashes per second rate. It doesn’t matter how cheap a card is to run if it struggles to output reasonable hash rates per second.
Finally, the last consideration is that of the blockchain. Only Proof of Work blockchains even support mining, but you knew that already. Some blockchains can be mined easily on “consumer” GPUs, but others are not so efficient. Some (such as Bitcoin) have exponentially exploded in popularity since their inception, that you are unlikely to succeed with any low powered GPU, and may find a mining rig of six or more GPUs produces more favorable results.
Calculating Hash Rates
Hash rates are not something you can figure out with a pencil and paper. The best way to determine how many hashes a card can produce is to test it. This is an expensive proposition, but fortunately, many miners from all over the world are often willing to share details of their GPU.
One such website is Mining Champ, but it’s still not ideal. This website contains a vast array of user-submitted hash rates, but these are limited to specific algorithms and blockchains. There’s a lot there, but they may not match the exact combination of blockchain and GPU you plan to use.
Keep in mind that these lists often go out of date. With Bitcoin’s sliding difficulty adjustment, regular new GPU releases, and different hashing implementations depending on the blockchain, any information available will often be out of date.
Another way to find the hash rate is to perform a quick Google search containing your GPU model, the blockchain, followed by “hash rate”. For example:
“Nvidia GTX1070 Bitcoin hash rate”
This card currently produces about 30 H/s, but like many other websites, this figure will be out of date soon.
Once you know the hash rate, you can begin to calculate the profitability. Calculators such as CoinWarz Bitcoin mining calculator, or thousands of other websites do all the work for you. Simply input your hash rate, power consumption, and electricity cost, and a variety of hourly, monthly, and yearly metrics will come out.
Making a Profit While Mining
Once you know the hash rate of your GPU, it’s a simple process in theory to make a profit. In reality, it’s often more complex than just buying the best card around.
You need to factor in the initial purchase price of your GPU, although it’s possible to sell this on later. You also need to consider the ongoing running costs, and any peripheral purchases required such as all the other computer parts. If you’re building a mining rig with more than one GPU, then you may also need to purchase additional power supplies, cooling, and mounting solutions.
As it stands right now, it’s not profitable to mine Bitcoin unless you don’t pay for electricity costs. Some countries subsidize energy bills but check with your local laws first, it’s often illegal to mine Bitcoin with government subsidized electricity!
If you’re thinking of mining Bitcoin with the intention of selling it later, you’re better off using the money spent on electricity to simply buy Bitcoin directly—it’s cheaper!
This may change in the future if Bitcoin appreciates again, but it’s something you’ll need to monitor all the time if you begin mining.
If you have the hardware already, and your computer is running all the time anyway, then it might be worth mining Bitcoin. While there will be an increase in energy consumption, it may not be significantly more than your current usage.
If this all seems like too much effort to you, then why not look into joining a Bitcoin mining pool instead? You can have all the fun for way less money.