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As ProgPoW Aimed at Stopping ASIC Mining Gets Supporting Votes, New Conspiracies and Debates Appear

Despite the large number of opponents and rumors of collusion between Ethereum developers and GPU producers, the ProgPoW algorithm has been supported by 94 percent of the community.

Ethereum (ETH) network users have unanimously supported the ProgPoW algorithm, which is expected to make the platform resistant to application-specific integrated circuit (ASIC) miners. Initially, opponents of the update prevailed over supporters by a margin of 96 percent, according to a Cointelegraph report on Feb. 15. The current scenario is exactly opposite, with 94 percent of voters favoring the implementation of ProgPoW, as evidenced by the Etherchain charts.

What is ProgPoW?

Simply put, ProgPoW is a version of the proof-of-work (PoW) algorithm, which is supposed to smooth the transition of the Ethereum network to proof-of-stake (PoS). As a part of this process, developers are exploring and proposing different solutions to fight off the mining difficulty bomb and make the network stable and resistant to attacks.

One of them is ProgPoW (programmatic proof-of-work), being designed by Ethereum developers to eliminate the gap in efficiency between Ethereum ASIC miners and graphics processing units (GPU) by making ASIC mining less efficient. This is necessary to protect the Ethereum network against a monopoly of ASIC hardware manufacturers.

The principle of the ProgPoW operation is slightly different from other algorithms that are resistant to ASIC miners. It is supposed to make the production of ASICs unprofitable since the manufacture process itself will require more financial and labor resources, and thus won’t pay off.

Making GPU cards more competitive and reducing centralization will be possible through making the task condition for mining impermanent and using all the resources and potential of video cards. The issue is that ASIC miners are designed for one specific task in mind: calculating blocks for mining cryptocurrencies. Meanwhile, video cards are flexible and can perform a number of tasks 一 from mining to transmitting an image.

Using a random task sequence eliminates the possibility of creating a fixed pipeline, as it happens with ASIC miners. In other words, to work with ProgPoW, miners need to be flexible.

Developers plan to reach such results with five innovations, under which the algorithm work will be based on computational capabilities, bandwidth and memory capacity.

Dominance shift

Keccak changes: The Keccak hash function size has decreased from the 64-bit keccak-f1600 to the 32-bit keccak-f800. The latter has been optimized for 32-bit platforms for better compliance with the architecture of video cards.

Increased mix state: This is the number of processor registers in which intermediate values ​​can be stored. They are significantly faster than RAM, because they are located inside the processor. In ASIC miners, chips are small and the number of registers lags behind graphic processors in performance. As a result, ASICs are forced to use RAM to work with this feature, which is several times slower.

Adding a random sequence of calculations in the main loop: The chip makes it impossible to create an ASIC device with a fixed pipeline, which could increase the speed of work or reduce consumption.

Adding reads from a small, low-latency cache with random addresses support: This causes ASICs to follow GPU memory hierarchy rules and limits their capabilities and performance.

DRAM increased from 128 to 256 bytes: Bigger volumes favor video cards. Specialized ASICs are not able to optimize a memory controller for the sake of improved performance.

Why do we need ProgPoW?

The main reason for developing the ProgPoW algorithm is the influence that ASICs have on the cryptocurrency sphere, which jeopardizes the main principle of cryptocurrency 一 decentralization 一 for the sake of making larger profits. Both giants like Bitmain and Innosilicon, and new companies like ASICMiner and Spondoolies, which monopolized the market, became the main reason for finding solutions to prevent centralization.

At the moment, Ethash, which is expected to be replaced by ProgPoW, is considered the most ASIC-resistant algorithm. Meanwhile, among the most vulnerable to attacks algorithms 一 Equihash, CryptoNight, X11 一 the efficiency of using ASICs exceeds that of GPU cards by several times. Ethash ASIC miners give users only a double advantage over video cards.

On April 3, 2018, Bitmain officially announced Antminer E3, capable of producing 180 mega-hashes per second (MH/s), with only 800 watts of power consumption. The ASIC miner model designed to mine ETH inspired other companies to join the ASIC hardware production, with unpleasant consequences for the Ethereum community 一 mainly related to the issues of security and integrity.

First of all, GPU farm owners started to suffer losses and lost interest in maintaining the network. In 2018, the revenues of the GPU cards producers fell and have been moving inexorably lower since then. Data provided by analytical company Jon Peddie for the Q4 of 2018 showed that total GPU shipments decreased by 2.65 percent from the preceding quarter, AMD shipments decreased by 6.8 percent, Nvidia decreased by 7.6 percent, and Intel’s shipments decreased by 0.7 percent. In total, year-to-year GPU shipments decreased by 3.3 percent. Global technology company Susquehanna revealed that the monthly profit generated for mining ETH with GPU rigs had dropped from about $150 in the summer of 2017 to zero values in November.

Profitability of mining with GPUs falls as ETH price slides

Moreover, hash rate and power became concentrated in fewer hands, which puts the network’s decentralization and security at risk. The reason is the market dominance of such mining giants like Bitmain, which built up its monopoly by producing new ASICs for top coins. The ecosystem has become increasingly centralized and vulnerable to attacks since then.

As new coins appeared on the CoinMarketCap charts, Bitmain stamped mining devices, one after another, for Monero, SiaCoin, ZCash, Bitcoin Cash. Coin developers began to worry about the threat of a 51 percent attack 一 a phenomenon when an attacker with 51 percent of a network’s mining hash rate in their hands is able to manipulate the network.

The last straw was on April 3, when Bitmain developers announced the release of the “world’s most powerful and efficient EtHash ASIC” for mining Ethereum and Ethereum Classic.

Since then, the Ethereum Foundation has been working on solving this problem, and as a result, the ProgPoW proposal appeared.


At the moment there are not many programs for mining cryptocurrencies on the ProgPoW algorithm, possibly because of the existing equipment optimization problem. The first cryptocurrency on ProgPoW was Bitcoin Interest (BCI), which was switched to a new algorithm in September 2018. Its developers presented the first miner for the new algorithm.

One of the latest miners that received support from ProgPoW was the TT-Miner chip. It is closed-source software, available only for Windows and running on new Nvidia video cards. Additionally, this miner supports Ethash, UBQhash and MTP algorithms. The developers charge a commission of 1 percent, which is already included in all the devices.

Community reaction and opponents

The new algorithm has caused a lot of controversy in the community since it not only protects the network against ASIC mining, but also allegedly gives an advantage to Nvidia video card owners over users who have AMD devices. Vitalik Buterin called it a distraction, while many other developers are skeptical of the new algorithm. In the guidelines for voting, Ethereum developers claimed that, due to a number of trolling messages appearing on social networks, they cannot understand which voting accounts are real:

“We have noticed a lot of trolling and shills on both sides of the debates from anonymous accounts on forums, youtube, telegram, glitter, reddit and twitter. There is no way to know if these accounts are real people who actually have economic stakes in ethereum, or are simply fake troll or shill accounts funded by one side of the debate.”

The developers also don’t exclude a probability of resistance from miners, some of whom may be dissatisfied with the decline in already small incomes. This is evidenced by the relatively small support among the mining pools: Only 35 percent of them supported the upcoming update of the algorithm 一 though Ethermine votes made up 36.5 percent and Sparkpool 27.6 percent of the total number of votes.

Ethermine is the largest Ethereum network pool, which controls 27 percent of its entire hashrate. It is not known how the voices are distributed within the pools, but it can be assumed that the users are divided approximately equally. Thus, for each person who loses revenue as a result of ProgPoW, there is one who may benefit from other miners leaving the network.

Ethereum users have reacted differently to the new algorithm, with some of them being concerned about the possible drop in revenues and others doubting whether this step will be efficient. Martin Koppelmann, CEO and co-founder of Gnosis, thinks that such a radical update should be implemented only if it’s really necessary:

Jorge Izquierdo, co-founder of Aragon, agreed that ProgPoW is not the number one task for the development of the Ethereum network:

Some experts and users believe that the solution of making ASIC mining unprofitable may lead to more dramatic consequences than the reduction of miners.

For example, Eric Conner, developer of, suggests that ProgPoW could lead to a chain split:

Another opposing point of view refers to using GPUs in countries with expensive electricity:

A number of miners and companies are also concerned about the fact that dominant ASIC producers may manufacture new hardware capable of working on ProgPoW. In particular, the co-founder of Sia, David Vorick, suggested that the new algorithm release won’t stop ASIC producers, and some of them might be able to secretly develop suitable devices in order to prevent possible hard forks.

Alexey Akhunov, one of Ethereum developers, said in a reply message:

“If we want to obsolete the current EtHash mining devices, but at the same time not to induce more secretive behaviour on the part of ASIC manufacturers, we need to ‘embrace’ it and switch to an ASIC-friendly algorithm now instead of an ASIC-unfriendly algorithm. Which [is] the opposite of what we are doing.”

Vorik also assumed that there are several large companies interested in producing special hardware for mining ETH, and the release of such devices would only be a matter of time.

Conspiracy theories

The conspiracy theories are vigorously discussed on the internet, and according to one, the team allegedly working on ProgPoW represents the interests of the leading manufacturers of GPUs 一 Nvidia and AMD.

Fuel was added to the fire by a statement of a team representative, who admitted that they have communicated with both Nvidia and AMD:

“We were lucky enough to have an email review that included engineers from the Ethereum Foundation, Ethereum Core Devs, Nvidia and AMD. The Nvidia and AMD engineers gave the algorithm a generally positive review.”

However, the allegations related to any agreements or conspiracies haven’t been proven, yet.

What’s next

Despite the fact that the update launch date is still unknown, the preparation for it is well under way. Ethereum Cat Herders, the group working on Ethereum hard forks, is going to audit the ProgPoW code once the voting ends. At the moment, developers are searching for companies to do the audit and are trying to raise $100,000 to perform it.

Meanwhile, Parity Technologies already integrated full ProgPoW support into its client, and other clients are testing the update, which means that the release may be just a matter of weeks away. Developers are also discussing the possibility of including the ProgPoW update in the next Istanbul hard fork in case two third-party audits doesn’t reveal any significant bugs or potential threats to the network.

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Nvidia Faces Class Action Lawsuit Over Losses After Diminished Mining GPU Demand

GPU producer Nvidia is facing a class action lawsuit over the losses reported by the company when demand for GPUs by miners diminished.

Graphics processing unit (GPU) producer Nvidia is facing a class action lawsuit over the losses reported by the company when lower crypto prices diminished demand for GPUs by miners. Schall law firm announced the lawsuit on Dec. 24.

The complaint states that “the Company made false and misleading statements to the market.” Namely, according to the announcement, Nvidia “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary.” Shall states that the GPU producer also declared:

“Any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.”

As Cointelegraph recently reported, after the cryptocurrency mining crash, Nvidia was the worst reported performer in S&P 500. After a massive sell-off of its shares, the stock price of the company fell by 54 percent.

In mid-November, an analysis by Susquehanna — a United States -based global trading and technology firm — observed that mining Ethereum (ETH) using graphics processing units was no longer profitable.

In the Susquehanna analysis, the profit per month for GPU Ethereum miners hit $0 by Nov. 1, down from nearly $150 in July 2017.

Earlier this week, Japanese firm GMO Internet announced that they would be leaving the mining sector, citing extraordinary losses over the year.

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Gaming Hardware Firm Razer Launches Token-Based Loyalty System and Desktop Miner

Gaming hardware producer Razer has launched its redesigned native virtual currencies and a desktop SoftMiner.

United States-based gaming hardware manufacturer Razer has redesigned its native virtual currencies and loyalty system and launched a desktop mining app, according to a blog post published on Dec. 12.

Founded in 2005, Razer has become a leading gaming hardware and software manufacturer in the U.S., Europe, and China. The company’s software platform reportedly has more than 50 million users. In the first six months of 2018, Razer’s revenues were $274.2 million.

Razer has redesigned its native reward system and virtual credits Razer zGold and Razer zSilver. Launched in 2017, the virtual currencies have subsequently gained over 5 million users, according to the post. From now on, the Razer zGold and Razer zSilver will be rebranded as Razer Gold and Razer Silver respectively.

In regard to Razer Silver, gamers will be rewarded with the currency for every Razer Gold spent, wherein the more Gold gamers spend, the more Silver they earn. Users can further exchange Razer Silver to products, discounts and vouchers.

The company is also launching a desktop app called Razer SoftMiner, which utilizes idle graphics processing unit (GPU) power of users’’ devices to solve blockchain-based puzzles on the back-end. Once users install and launch the app, they will be awarded with Razer Silver depending on the amount of time SoftMiner has been operating, and the processing power of their PCs. Currently, SoftMiner is reportedly in beta and supports 5,000 users per week.

However, some have called the efficacy and economy of Razer’s miner into question, claiming it is a scam. A Twitter user Scott Chicken commented on Razer’s announcement of the new product, calculating that the company earns at most £0.35 ($0.44) per day mining at full power, making each Silver worth £0.0007 ($0.00089). Chicken said that “running this at full power, every single day all day it takes 560 days to earn a Razer keyboard, valued at £199 [$251] as of their website.”

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Gaming Firm Wants to Pay Players to Mine Cryptocurrency

When the crypto chips are down companies often seek alternative methods of generating income. Gaming equipment giant Razer wants to pay gamers to mine crypto using their graphics cards.

The new crypto rewards program is called ‘Razer SoftMiner’, and it enables users to put their GPUs to work mining “Silver” which according to the firm is not actually a cryptocurrency. The catch for the miners is that they don’t get to keep what they mine but will get rewarded in the way of discounts or offers from the company. In a Tweet the firm stated;

“Have a gaming rig on idle at home? Here’s a new way to score Razer Silver: launch Razer SoftMiner on your PC and start racking up Silver—one step closer to the reward you want, for doing nothing at all.”

It does come with the caveat that running the software “uses a substantial amount of your GPU power,” according to PC Gamer. The FAQ goes on to explain;

“We work with crypto mining technology to harness your computer’s GPU. In turn, we award you with Silver, giving you access to Razer’s ecosystem and suite of rewards.”

In other words the San Francisco based company will be keeping the crypto that users mine and offering them other tokens to trade for ‘rewards’. It has not specified which cryptocurrency will be mined but it will have to be one that can be done using graphics cards and not higher powered hardware. There does not seem to be an advantage for users that can simply install their own software to mine crypto which they can at least keep themselves.

Razer has added that mining speed will be affected by the specifications of the GPU and obviously the amount of idle time that can be dedicated to it. “If you have the proper setup, you can earn approximately 500 Razer Silver or more within a day!,” it added without specifying the value of this ‘silver’.

Someone had crunched the numbers and came out with a value of around $0.44 per day mining at full power, or $0.0009 per token. Another pinch is that the silver mined expires after a year so it must be redeemed before then which prevents amassing a whole lot of it.

Considering the cost of electricity and the wear and tear on the hardware this does not sound very lucrative at all. A win for Razor it seems, especially if it can accumulate enough crypto at low prices and then sell the stash when the markets recover.

The post Gaming Firm Wants to Pay Players to Mine Cryptocurrency appeared first on Ethereum World News.

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New ASUS Partnership Allows Users to Mine Crypto With Idle GPU Power

ASUS to allow its graphics card owners to mine crypto and cash out via PayPal and WeChat through a new partnership.

Taiwan-based tech giant ASUS has partnered with GPU mining platform Quantumcloud to allow users to mine crypto via their graphic cards, multinational tech media TechRadar reported Thursday, Nov. 30.

According to the agreement, ASUS graphic cards owners will be able to mine crypto through Quantumcloud software and withdraw earnings using PayPal or Chinese app WeChat.

The new partnership allows gamers to monetize idle GPUs when the units are not occupied by graphic-consuming processes by mining cryptocurrencies such as Bitcoin (BTC).

However, Quatumcloud does not guarantee specific profits or outcomes for users, stating that users have to consider usage costs on their own, according to U.K.-based tech publication The GPU-mining startup claims to provide high standards of customer data protection compliant with General Data Protection Regulation (GDPR).

Earlier in November, ASUS teamed up with California-based semiconductor supplier AMD and other major tech companies to produce eight new crypto mining rigs. Partner companies reportedly include Sapphire, ASROCK, and MSI, among others.

In July, Cointelegraph reported that GPU prices were declining along with sinking prices in crypto markets. Other GPU manufacturers like Nvidia have been negatively affected by the current bear market. When the firm announced its Q3 results earlier this month, it revealed a “crypto hangover” due to disappearing sales to crypto miners.

Meanwhile, major crypto mining firms in China have reportedly started selling off their mining hardware by weight, following a recent collapse of crypto markets that began in mid-November.

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GPU Prices Fall Following Slump in Cryptocurrency Markets

The price of specialized graphics processing units (GPUs) has been declining along with sinking prices in digital currency markets, Computerworld reported July 10.

While at the end of 2017 and beginning of 2018 cryptocurrency mining caused a sharp rise in the price of high-end gaming cards, the tendency seems to have reversed as crypto markets continue on a downward slope.

Add-in board (AIB) prices are reportedly falling and supplies increasing amid a severe drop in cryptocurrency prices. Manager of digital media at Jon Peddie Research C. Robert Dow told Computerworld that they predicted the drop, adding that “the cost to run the mining rigs is not insignificant, so when the price for the currencies drop… people will run rigs and choose to dump AIBs on the secondary market hoping to recover some cost.”

A survey conducted by Jon Peddie Research revealed that crypto miners purchased over 3 million AIBs to the tune of $776 million in 2017, where most of them had been produced by semiconductor and computer microprocessors manufacturer AMD. At the end of 2017 and the start of the current year, many high-end expansion boards were sold out, leading to a price increase.

According to Computerworld, in April AMD’s OEM 4GB RX 580 six-pack was sold out at the price of $3,600, while today it is available for $2,500. An Nvidia GeForce GTX 1080 Founders Edition, 8GB GDDR5X PCI Express 3.0 Graphics Card was sold out at a price tag of $1,050, but now can be purchased for $709. Dow commented on the changes:

“We also suspect that Nvidia and AMD have some built up inventory, and that will affect ASPs as well. Prior to the surge in buying of AIBs for cryptocurrency mining, AIB prices were flat to declining slightly which is a trend that will continue at least until new families of cards are introduced.”

The recent price slump has not deterred manufacturers from releasing new cryptocurrency mining hardware. In May, U.S. hardware manufacturer ASUS announced the release of its “second generation” cryptocurrency mining motherboard, which is scheduled to launch at the beginning of the third quarter of 2018.

In April, Chinese tech giant Bitmain announced the release of an Ethash ASIC miner, calling it the “world’s most powerful and efficient EtHash ASIC miner.” Bitmain surpassed the U.S. GPU manufacturer Nvidia in terms of overall profits in 2017, earning an estimated $3-4 billion and taking 70-80 percent of the market for Bitcoin (BTC) miners and ASICs.

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Crypto Market Downturn Puts Drag on High-End GPU Prices

New research suggests that prices for high-end graphics cards – coveted by both cryptocurrency miners and gamers alike – are falling.

The research was conducted by John Peddie Research, a tech marketing and consulting firm based in California. As tech publication Computerworld reported on Tuesday, the report shows higher-priced products from Advanced Micro Devices (AMD) and Nvidia have dropped significantly from their highs experienced earlier this year.

For example, according to Jon Peddie Research, the price of an OEM 4GB RX 580 six-pack – a top-notch GPU from Advanced Micro Devices – was $3,600, having completely sold out as of April. But that product is available on the market for $2,500, a reduction of $1,100.

“We have predicted a drop in [application specific processors] as [cryptocurrency] prices dropped,” C. Robert Dow, manager of digital media at Jon Peddie Research, said in an email to the publication, adding:

“The cost to run the mining rigs is not insignificant, so when the price for the currencies drop…, people will run rigs and choose to dump AIBs [add-in-board] on the secondary market hoping to recover some cost.”

Meanwhile, the research’s data also show that the number of AIB shipments directly to cryptocurrency miners dropped about 55.5% compared to the same quarter of last year.

From the charts

Additional data provided by a website called PCPartPicker, which tracks the prices of computer components, also indicates that there is a general downtrend occurring for GPUs.

For example, the chart below shows price developments for the Radeon RX Vega 64 – a product hailed by some tech bloggers last year as a premier tool for mining cryptocurrencies. In spite of several short upticks, the price of that product seems to have peaked in early March.

Similar accolades were published for the GeForce GTX 1070 Ti – but it, too, has seen a gradual price decline since around the same time.

Whether this means anything in the long-term remains to be seen – cryptocurrency mining is effectively an electricity arbitrage, where gains are made when the cost of mining (including hardware, energy and labor) is less than the return on the coins once sold.

Given that the cryptocurrency market has declined overall since early this year, demand would, in theory, fall in tandem with those figures.

More answers could come in the form of future financial results from Nvidia and AMD, both of which have made a point to discuss the impact of crypto mining on their bottom lines. While business was great by the end of last year, that state of affairs may be changing, according to these figures.

GPU image via Shutterstock/Graphs from

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Bitcoin Gold Introduces Algorithm To Counter ASIC Centralization

Bitcoin Gold Hard Fork At Block 536,200

Bitcoin Gold was founded with the decentralization of mining in mind, adopting algorithms which ASICs cannot mine on. Many critics of ASIC mining machines see these specialized pieces of hardware as a source of centralization, as ASICs can be bought en-masse, putting a copious amount of relatively affordable hash power into the hands of a single entity. 

A group of individuals thought it best to build off of this criticism, forking off the main ASIC-infested Bitcoin blockchain into Bitcoin Gold in October 2017. BTG first enlisted the use of the Equihash algorithm, which was ASIC-resistant at the time. In the nine months since then, new Equihash ASICs have begun to edge out GPU miners, with these specialized machines offering an exponentially higher dollar/hash ratio.

On Tuesday, the Bitcoin Gold team announced that it had successfully implemented a network upgrade by initiating a hard fork on the 536,200 BTG block. The release from the Bitcoin Gold team member, Edward Iskra, noted that the upgrade changed the mining algorithm for BTG. With the algorithm changing from Equihash to an updated version of the aforementioned algorithm, fittingly named Equihash-BTG.

This upgrade is an attempt to keep ASICs away from the network, introducing a layer of ASIC-resistance that should stave off any attempts at centralizing BTG mining. Although successful so far, it is likely that ASIC manufacturers may pick up on the new Equihash-BTG algorithms moving into the future.  

The May BTG 51% Attack

Bitcoin Gold experienced a 51% attack in May, amongst growing fears of similar attacks on other blockchains. The double-spend attack saw $18 million worth of BTG being exploited by the malicious attackers, getting a nice payday from the attack.

According to analysis from the cryptocurrency community and BTG team, the 51% attack was a result of rented hash power, which may have consisted of ASIC miners. The new algorithm ensures that there is no rental market for Equihash-BTG miners, making the upgraded blockchain more secure.

Edward Iskra wrote:

The recent “51%” attacks, which may or may not have involved ASIC miners, were channeled through hashpower rental markets – but with this change in algorithm, there’s no longer a rental market for the algorithm we’re using, and it’s harder to set one up than before. This means more safety.

Additionally, this hard fork also introduces a new difficulty adjustment system, ensuring that the BTG blockchain is responsive to large hash power shifts.

LWMA, the improved difficulty adjustment algorithms, allows for the better stabilization of block times, assuring that a new block gets pushed out approximately every 10 minutes after a hashrate swing. Iskra chalked up this change to the auto-switching method which miners enlist to receive the most mining profits.

The release stated:

Our improved algorithm will help the blockchain adjust more quickly, providing a steadier flow of blocks.

Rising Bitmain Power On New Algorithms

Bitmain is one of the most influential companies in the cryptocurrency space, reportedly generating over $3 billion in profits in 2017 alone. The ASIC manufacturer historically built ASICs for the SHA-256 and Scrypt algorithms, or for Bitcoin and Litecoin respectively. However, Bitmain has recently started creating new ASICs for algorithms that were previously ASIC-resistant, algorithms like Equihash and EthHash. 

These news ASICs have begun to affect Equihash and EthHash blockchains, such as ZCash and Ethereum. GPU miners who contribute hash power to these blockchains have been seeing declining profits, with ASICs easily outperforming graphics card rigs.

Ethereum and ZCash have abstained from forking away from ASICs, leading to an environment where GPU miners have had to bow out of mining pools. This will only help Bitmain hold its monopoly on the cryptocurrency mining industry, which lacks competitors to this ever-growing ASIC giant.

Title Image Courtesy of Rebcenter-Moscow


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Top Five Biggest Crypto Mining Areas: Which Farms Are Pushing Forward the New Gold Rush?

The mining industry is probably the oldest activity related to cryptocurrency. It all began in 2009, when Satoshi Nakamoto generated the first block on the Bitcoin network.

Today, mining is an entire industry which spans 114 countries around the world, and restlessly ensures the functioning of the global network of cryptocurrencies. According to analytics, the total profitability of the market over the past year comprised $4.1 billion. This figure doesn’t include the income earned from the sale of mining equipment, which is estimated to reach some $3-4 billion, as is the case of industry giant Bitmain.


Bitcoin network

Along with the popularity of mining, the complexity of the Bitcoin network also grows. Despite the fact that 80 percent of Bitcoin has already been mined, according to experts, the entire supply will be exhausted only by 2140. The situation is explained by the fact that the calculations necessary for the production of cryptocurrency are constantly becoming more complex, and the mining process takes more time and energy.

At the same time, between 30 and 60 percent of the profit gained from mining is spent on energy costs. Figures show that to maintain the entire computer infrastructure working with Bitcoin, it would take 30 nuclear reactors running at full capacity.

Blockchain size

Despite the reduction in the reward for generating blocks, a halving in the mining reward size from 25 Bitcoin to 12.5 Bitcoin and the increasing complexity of mining, miners can still receive up to $20 million per day in transaction confirmations. This staggering number attracts new players to join the ‘digital fever’ — and the equipment manufacturers to invent more efficient ways to extract Bitcoin.


In the summer of 2017, with the growing popularity of cryptocurrencies, market demand grew not only for professional equipment, but also for graphics cards (GPUs). In 2017 alone, more than three million discrete graphics cards were purchased for more than $776 million, Jon Peddie Research states. PC gamers were unable to purchase top model GPUs, which had sold out to miners before they even arrived on shelves, and the manufacturers of AMD and Nvidia cards fixed the growth of profits.


Image source: Wccftech

In the second quarter of 2017, Nvidia increased revenues by more than 50 percent, compared to the second quarter of 2016, reaching $251 million. AMD revenue for the same period increased by 18 percent — $1.2 billion. Following the fall of the market, interest in mining also decreased — AMD and Nvidia are both expecting a decrease in revenues in the second quarter of 2018.

At the same time, mining is reaching industrial proportions. Around the world, miners have united and created entire plants and hangars, and thousands of GPU cards are assembled into giant farms with peta hash capacities. Some companies repurpose former plants and invest millions of dollars into building infrastructures for mining. On June 6, the mining company CoinMint announced it plans to open a Bitcoin-mining plant in a former aluminium smelting factory in upstate New York, near the U.S.-Canada border. Supported by the U.S. government, CoinMint aims to create 150 jobs for the next 18 months and allocate $700 million to revamp Alcoa’s 1,300 acre plant.

At the same time, large players find more sophisticated methods of reducing energy costs and increasing equipment productivity — from building farms in caves to launching miners to space. Who are these industrial miners? Cointelegraph invites you to visit the five largest farms in the world.


Launched: 2012

Location: Washington, U.S.

Hashrate: 1.3 PH

The emergence of new players in young and profitable niches is often difficult to predict. Billionaires are those who, until recently, repaired computers or worked in an electronics store. One of them, Dave Carlson, began to mine with an ordinary GPU and now owns the largest mining farm in North America.

A software specialist and entrepreneur with 10 years of experience decided to take up mining after having faced financial problems in his previous job at an advertising company. Founded in the basement of his own house in 2012, the MegaBigPower company, which was later renamed into GigaWatt, turned into a multimillion-dollar business in just one year.

Today, the farm is situated in a former industrial warehouse. However, its exact location is not disclosed, similar to other farms, where owners prefer not to attract the attention of public authorities.


Image source: WSJ

As the company expands, Carlson estimates his monthly operating expenses, including salaries for 15 employees, at more than $1 million. The final figure of 1.3 peta hash, in his words, pays it off in full. Moreover, having managed to attract additional investments, the entrepreneur started production of mining equipment based on Bitfury chips for sale to other Bitcoin enthusiasts.

Carlson’s business is apparently going well. Among the factors that contributed to his success, Carlson specifies not only a desperate desire to escape poverty, but also the luck to have low electricity prices. Washington state, where the company is based, offers some of the cheapest power in the country with just $9.56 per kWh for individuals and $8.42 per kWh for businesses.

Genesis Mining

Launched: 2014

Location: Iceland

Hashrate: 1000 GH

Another owner of a truly large mining farm is Genesis Mining. Initially, their mining capacity was located in Bosnia and China, but today they are concentrated in Iceland and Canada. The cold climate — combined with cheap electricity prices — makes these countries attractive for mining cryptocurrency.

It is believed that Genesis mining farms are the largest consumer of electricity in Iceland. The electricity consumption and cooling issues are usually kept secret by large miners, so as is the exact location of their farms. Genesis, like Carlson and others, in accordance with their security policy, does not disclose the exact geographical location of its mining farms.


Image source: Bitcoin Wiki

Dalian mining farm

Launched: 2016

Location: Dalian, China

Mined monthly: 750 BTC

Electricity costs monthly: $1,170,000

Hashrate: 360000 TH*

*Given the average Bitcoin network hashrate of December 2017

China is known for its numerous plants for the manufacture of video cards and ASIC miners. Consequently, the miners in China have the advantage of purchasing equipment at lower prices. The delivery of equipment is cheaper — or even absolutely free.

China is amongst countries with the lowest price for electricity,valong with Venezuela, Taiwan, and the Ukraine. The most important factor in this matter is the decision of the Chinese government to encourage the industrial production of cryptocurrency by reducing the price of electricity consumption for the official owners of such farms.

China has a huge population, which increases job competition. In the country, industrial cities have existed for a long time, with workers living without visiting the outside world at all. The same is practiced at mining farms, where system administrators are ready to live in dormitories near a farm for a relatively small salary, ensuring uninterrupted production of cryptocurrencies.

All these factors create a fertile ground for the deployment of the largest mining farms, like in Liaoning province. Its small city of Dalian is the center of mining in China and, probably, the whole world. It is a three-story mining farm with a specially designed ventilation system. Currently, the farm in Dalian accounts for more than three percent of the hash rate of the entire Bitcoin network.


Image source: Bitcoin Wiki

Another Chinese province, Sichuan, launched an industrial farm near a hydroelectric power station. Since 2016, the capacity of the farm has grown almost threefold and reached 12 PH. Other provinces, throughout China, are also not without their own large mining farms.You can easily understand, when such a farm is nearby, because of the piles of obsolete mining equipment.


Image source: Politico

Swiss mining farm

Launch year: 2016

Location: Linthal, Switzerland

Hashrate: Unknown

The largest mining farm in Switzerland is located in the small village of Linthal in the eastern part of the country. Its owner, Guido Rudolphi, has already run a mining farm in Zurich but found the operating costs too high. After almost two years of searching, Rudolphi opted for Linthal, which offers the most attractive prices for electricity in the country.


Image source:

The new farm, located in a former factory building, is considered the largest in Switzerland. Although the issue of cooling processors still remains relevant, Rudolphi insists that the possible financial benefit is not decisive for him. The world needs Bitcoin more for political reasons, he believes. The owner of the farm compares the cryptocurrency with the internet of the 1990s, when many people looked at this phenomenon with a great deal of skepticism.

Russian farms

Mined monthly: 600 BTC

Hashrate: 38 PH

Russia is also among the countries in which large mining areas are located. The largest of these is believed to be located near Moscow, though the exact location of the farm is not disclosed. The power of the Moscow farm allows for the mining of approximately 600 Bitcoin a month. The currency is generated by 3000 Antminer S9 ASIC-miners and, for this, a performance of about 38 PH per second is needed. To cool this amount of equipment, modern ventilation from Iceland is used. The electricity expenses are over $120,000 each month, states.


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Looking to the future

Major mining farms began to appear only a couple of years ago. In 2014, these were farms of enthusiasts. Today, mining farms consist of large technological infrastructures with a regular staff of professional employees, like Coinmint, which combine into agglomerates at the site of former factories and hangars. With the increased complexity of the network and the declining prices of cryptocurrency, individual miners are pulling out. However, those players who managed to deploy large-scale infrastructures will be able to provide an ideal balance of productivity and low cost.

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Nvidia Racks Up 300,000 Overstock GPUs As Mining Interest Dwindles

Nvidia-According to an article from Gadgets360, a popular technology media source, an over 300,000 GPU return was the result of a ‘top 3’ Taiwan OEM realizing the lack of demand in the computer hardware market.

Some have suggested that the recent influx of overstock GPUs will lead to a delay in the release of a new lineup of Nvidia cards, originally expected to arrive in Q2/Q3 2018. This would make sense, as Nvidia would want to sell all of the cards in their 10 series before making any large moves towards new hardware. If the aforementioned reports are accurate, Nvidia’s overstock can be worth over one hundred million dollars at MSRP prices.

The rumored 11 (Ex. 1180) series cards have become an important topic of discussion in the technology and cryptocurrency communities. Both groups believe that the performance of these new cards will easily overpower any of the GPUs from the previous series.

Nvidia Refocuses on Gaming As GPU Mining Slows

However, Nvidia has begun to quash the hopes of GPU miners, by announcing that they will begin to refocus on gaming, instead of the immense profits produced by the GPU mining sub-sector.

Jensen Huang, Nvidia’s CEO, said:

We’re working really hard to get GPU down to the marketplace for the gamers and we’re doing everything to advise retailers and system builders to serve the gamers. And so, we’re doing everything we can, but I think the most important thing is we just got to catching for supply.

Nvidia revealed that revenues from the cryptocurrency industry amounted to $289 Million, nearly 10% of all reported revenue streams. Although this figure represented a substantial amount of sales, Jensen expects a ⅔ decrease in cryptocurrency demand over Q2.

With Q2 coming to a close shortly, it is clear to see that GPU demand has gone down, but exact numbers are still unclear. Many have attributed the mining demand slow-down to decreasing cryptocurrency prices, along with the rise in prominence of ASIC miners.

Firstly, cryptocurrency prices have declined over 70% since the start of the year, with mining difficulty still rising. This has led to an unsustainable market for GPU miners, with many users reporting a large loss in mining profitability. A select few, who live in areas where power costs exceed average levels, have begun to shut down their mining farms entirely, as profitability goes out the window.

GPUs Lack Efficiency When Compared To New ASICs

Secondly, Bitmain has recently announced their expansion into new mining algorithms, unexpectedly releasing ASICs for ETHhash and Equihash. Coins mined on the two aforementioned algorithms have historically been mined on GPUs, with Ethereum and ZCash being the most popular cryptocurrencies on these algorithms.

The new ASICs, titled the E3 and Z9 Mini, produce an exponential increase in the hashrate/$ performance metric. Ethereum and ZCash were originally expected to hard-fork away from any ASIC miners, however, developers have been slow to make any moves towards ASIC resistance. As the aforementioned ASICs arrive at the homes of miners, mining difficulty will begin to rise to new heights, heights where GPU miners will be unable to reach.

The GPU mining market is in a precarious situation, as profits slow. Nvidia has begun to acknowledge this, with analysts expecting a similar situation to occur with another hardware manufacturer, AMD.