Each cryptocurrency has its own nuances regarding the interval at which new tokens or units of cryptocurrency are released into circulation. That release is defined by the math that governs that cryptocurrency.
Each computer providing computing power to a cryptocurrency’s network has a chance of being the recipient of newly released currency. Mining is the common term used when talking about that process. It is called mining based on how gold and other precious metals are introduced into circulation.
Following that line of thinking, computers that are mining are called mining rigs.
What is a mining rig or computer actually doing?
When a mining rig is mining the work it is doing depends on the specific cryptocurrency. Solving cryptographic puzzles in an example of work that is performed.
From a task-based standpoint, another type of work that is commonly performed is validating transactions. Regardless of the work being done, miners are primarily participating for the chance that they will be granted the newly minted tokens.
Types of cryptocurrency miners
There are various types of hardware that can mine cryptocurrencies. Which hardware is the best varies by the cryptocurrency itself. The three types of crypto currency mining hardware are:
ASIC is an acronym that stands for Application-Specific Integrated Circuit. An ASIC is a specialized computer that is meant to do one thing and do it as efficiently as possible. An ASIC is great at it’s core task but virtually worthless at doing anything else. ASIC miners are the only way to mine bitcoin profitably today.
A CPU is the brains of a computer. CPU is an acronym for Central Processing Unit, and is the processor inside a computer. The most common CPUs by manufacturer are the processors by Intel and AMD (Advanced Micro Devices). CPUs can mine many cryptocurrencies, but are inefficient at mining just about all of them in comparison to ASIC and GPU miners.
In addition to a CPU, modern computing devices also have a Graphics Processing Unit, or GPU which focuses on a device’s display functions. Examples of what a GPU routinely does includes rendering images, animations and displaying video.
As GPUs have evolved, their processing capability has been found to be efficient at solving certain types of repetitive, complex, mathematical problems. The math involved in cryptography is one such type of math, and the reason why GPU mining rigs exist.
If you’re building a cryptocurrency mining rig you’re likely building a GPU Miner. Almost all Ethereum mining and mining popular alt coins like Zcash and Monero is performed with GPU miners.