Cryptocurrency mining has exploded in recent years, evolving exponentially, and so have the types of miners. We have moved from amateur miners solving algorithms in their spare time to high-performance commercial platforms.
Today in 2019, cryptocurrency mining has become more complex. This popular practice allows miners to reap rewards, ranging from small to large currencies. Miners have different incentives for mining such as a niche hobby or more commercially-driven reasons. In addition, there has been an increase of cryptocurrency investors who use their crypto assets to back other blockchain businesses.
In order to understand the different types of cryptocurrency miners, we first need to look where it all began.
The hobby miner
Back when cryptocurrency mining was first introduced, many individuals mined for the sole purpose of it being a hobby. It has accelerated significantly since then and has become increasingly more mainstream. However, there are still many individuals that mine for this reason. Hobbyists are able to earn a small reward while taking part in something they love. This unique hobby allows individuals to not only earn rewards but also the ability to mine for gaming purposes.
PC gaming enthusiasts are able to turn pretty much any computer into a mining rig, which then solves complex problems and in return the individual is able to earn currencies for games and trade with others. Hobbyists tend to use a GPU to mine which involves using a graphics card to solve algorithms. These GPU setups give the user the option to mine more than one currency which results in low levels of electricity consumption. However, with this being said, since time has gone on, some GPU devices are struggling to mine the more sophisticated currencies.
The commercial miner
Since its inception, mining had evolved over the years and as technology has become more sophisticated we have seen more and more commercial mining rigs pop up. Crypto mining is now considered a lucrative business and is being used for commercial reasons. More and more commercial mining rigs are now available and rising in popularity, with hundreds of mining farms being built across the globe.
Highly skilled individuals are setting these crypto mining farms up in remote locations and using it as a business opportunity. Due to these mining rigs producing large amounts of electricity and heat, they are usually located in cold countries, such as Iceland. With these vast mining farms being produced, it is becoming even harder for smaller or individual miners to compete.
ASIC mining rigs are dominating the commercial mining industry. It is a professional mining chip designed for computing one specific algorithm and only that algorithm. ASICs are much more efficient and powerful compared to a GPU which is why it is usually the preferred option for commercial operations. Although ASIC mining has always been preferred, GPU mining has started to rise in popularity and is being praised for its ability to mine more than one currency at a time.
The investor miner
As cryptocurrency continues to prove itself as a viable financial entity, things typically tied to traditional financial institutions are also developing a crypto counterpart. This is particularly true for investment. Crypto investors often purchase professional hardware and treat it as a way to earn large amounts of cryptocurrency that they are then able to invest in ICOs and other blockchain-focused projects, with the potential to reap even larger rewards if those endeavours are successful.
There is usually a divide between these investors on the type of mining rig they use, with some opting for a GPU and others with an ASIC depending on the size and level of investment. This decision will usually be made on which currency they want to mine and if they are wanting to mine multiple coins at a time. Afterall, the benefit of cryptocurrency and indeed ICOs is that they are considered free from the restraints associated with traditional finance and essentially anyone can become an investor. Crypto investors are widely different to other miners as they tend to focus more on the long-term benefits of digital currencies.
Evidently, these three types of miners all have different motivations to mine cryptocurrencies and it will be interesting to see how they may evolve through the years and if they change. Despite going through a turbulent time, crypto mining has become more mainstream, so now the question is: will we continue to see the number of individuals investing increase?