The cryptocurrency mining industry can be roughly divided into two segments: Application-Specific Integrated Circuit (ASIC) mining and Graphics Processing Unit (GPU) mining. When bitcoin and other cryptocurrencies prices appreciate, web searches for how to mine, buy, and sell different cryptocurrencies go parabolic.

Regardless of market conditions (bull or bear market), retail miners should understand the different opportunities and challenges presented by different types of mining.  This article offers a brief overview of GPU and ASIC mining and key considerations for a miner choosing between them.

GPU mining

Overview

GPU mining typically lowers certain barriers to entry for newer cryptocurrency miners, including cheaper hardware options and a wider variety of mineable coins. Some GPU miners refer to the activity as a gateway into crypto mining.

Acquiring and configuring a GPU mining rig is relatively simple, and most would-be miners already have a GPU in their home that can be used for mining. GPUs can be purchased from most big box electric stores or online marketplaces.

Configuring GPU miners is also much simpler than it was early on in the history of cryptocurrency mining. Gone are the days where configuring GPU mining software required Linux knowledge. GPU mining software is now typically a one click, windows-based download, this software is even supported by older laptops. What’s more, most mining software have built in wallets.

Key considerations for GPU miners

  • Which coin should you mine? This process can be difficult or time consuming, but a variety of market data aggregation tools offer simple ways to measure expected profitability, hashrate growth, and popularity.
  • How do I maintain my GPUs? Compared to ASIC mining, GPUs often break more easily and require more maintenance. But, parts are generally easier to find and purchase online than replacement parts for ASIC machines.
  • How much heat do GPUs produce?  GPUs produce far less heat than ASICs because they consume less power. GPU mining machines can usually be placed in a bedroom or living room to offer a bit of heat without a painful level of noise. But if a miner has multiple GPU mining rigs, they may require their own space.
  • What materials do I need for GPU mining? Getting started with mining requires a variety of common hardware, including the GPUs (AMD or Nvidia) or repurposed laptops, ethernet cables, etc.
  • Is home mining the only option? No, first-time miners can consider hashrate brokerages (e.g., NiceHash) that allows miners to buy hashrate from other miners before or in place of setting up an at-home mining operation.
  • Where can I sell GPUs? For GPU miners, the good news is that either gamers or other miners will want to buy hardware. For ASIC miners, only other miners can buy the machines.

ASIC mining

Overview

ASIC mining machines are hardware developed for chips specifically designed for one single purpose: cryptocurrency mining. Unlike GPUs, which are demanded by both gamers and miners, cryptocurrency mining ASICs are manufactured solely for mining. This specialized hardware makes GPU mining largely unprofitable for leading Proof-of-Work assets like Bitcoin.

ASIC mining machines are typically more expensive, louder, and more power intensive than GPU machines. But they generally require less maintenance and offer more efficient power use. Compared to GPUs, however, ASIC miners are harder to source, and at-home miners may have to modify the electrical set up in their home before plugging in (i.e., installing a 220v power outlet.)

Key considerations for ASIC miners

  • What coins can I mine with ASICs? The options for cryptocurrencies to mine with ASICs are far more limited compared to options for GPU miners. Most ASICs are designed for Bitcoin, Ethereum, Litecoin, Zcash, and a select few other assets.
  • Can I mine with ASICs at home? Yes, at-home mining with ASICs is common. But unlike GPU mining rigs, ASICs are much louder and are typically stored in basements, garages, sheds, etc.
  • How much heat do ASICs produce? ASICs produce so much heat that some miners repurpose it to grow produce or heat hot tubs. Both GPU and ASIC miners, however, should build hot and cold lanes to move the heat out and shuffle fresh air in with a robust ventilation solution.
  • How do I maintain ASICs? Most problems with ASIC miners can be solved by simply rebooting the machine. But if an ASIC continues to malfunction, the machine(s) can be sent to a licensed repair facility. Replacement parts for ASICs are harder to source online compared to parts for GPUs.
  • How much power do ASIC machines need? ASIC machines consume much more power than GPUs. Most homes in North America are not equipped to power ASIC mining machines. A 220v outlet, like the kind installed for washing and drying machines, is needed to power ASICs. At-home miners must properly upgrade their wiring to handle the electricity needed to power ASICs.
  • Where can I sell ASICs? Unlike GPUs, other miners are the only counterparties for buying or selling cryptocurrency mining ASICs. A variety of secondary markets and reselling services offer miners the ability to buy and resell hardware.

Read: The basics of at-home bitcoin mining.

Although ASICs can be used for mining other cryptocurrencies, bitcoin mining is the most popular among ASIC miners. Regardless of which type of mining you choose, both require financial and time commitments before reaping significant rewards. Also, GPU and ASIC mining are not mutually exclusive, they can compliment each other.