FPGA | Blog | Blockbase

How FPGA Mining Works: The A-B-Cs of FPGA Mining

A Field Programmable Gate Array, or FPGA, is a special type of integrated circuit that has a wide range of uses in technology. From signal and image processing to use in mathematics and general high-end computations, FPGAs, since they are programmable in the field after purchase by the customer, can be arranged and customized to meet any computational need.

You can think of FPGAs as Lego blocks. Stand-alone Legos allow you to build many different things using the same, reconfigurable pieces. One piece may be used to make the roof of a house, and the same piece can later be retrofitted to make the chassis of a car. In a similar fashion, FPGAs can be used to build almost any digital circuit, and they can run different software and operate using different algorithms – something which is very important in the cryptocurrency mining world, because different crypto assets use different algorithms to arrive at specific hashes (more on hashes below) to run and maintain their networks.

How FPGA mining works

Bitcoin - Cryptomining | Blog | BlockbaseIn order to better understand how and why FPGAs are used in mining, it would help to take a step back to look at how blockchain systems and mining actually work.

Bitcoin, and virtually every other cryptocurrency, are all made up of blocks of data that are linked to one another by unique strings of numbers and letters, known as hashes. This is made possible by the use of cryptography that ensures that only one specific hash can be used to link the current block of data in the blockchain to the next. The hashes themselves are not predetermined, and instead, have to be arrived at through trial and error.

Think of a situation in which you ask your friends to guess a number between 1 and 1,000 without placing limits on the number of guesses each person can make. You tell them that they will be rewarded if they make the correct guess and that everyone can move on to the next challenge once the correct number is arrived at. Clearly, the more guesses that each person can make, the higher their chances are of guessing the correct number. And once they guess the correct number, they are rewarded with free bitcoin (or whatever cryptocurrency we are dealing with), and everyone participating in the activity can also move forward to the next challenge once the current one is completed.

This process of expending time, energy, and resources towards finding the right hash and maintaining the integrity of the network (by proving, via mathematical computation, that the hash you have arrived at does, in fact, successfully link the current block to the next), is what is known as proof of work. For spending these resources towards maintaining the network and adding additional blocks to the blockchain (and allowing everyone to move along to subsequent challenges), miners are rewarded with the crypto asset they were calculating hashes for.

FPGAs and mining

Extrapolating the guessing game to crypto mining, imagine that you ask not a few friends to guess a number between 1 and 1,000 but millions of miners to guess a long hexadecimal number that is 64 digits long. Getting the right answer will obviously take a lot of computing power and churning out large volumes of numbers in an attempt to be the first one to arrive at the correct answer.

This is where FPGAs come in.

In order to arrive at the right hash, miners can use CPUs, GPUs, FPGAs, or ASICs. CPUs are regular processors, but they are no way fast enough to compete with the high-end hardware used by industrial miners to arrive at the highly valuable hexadecimal hashes that are used to maintain the bitcoin network (though they could potentially be used for mining less power-consuming cryptocurrencies). The same holds true for GPU mining.

FPGA mining, however, provides users with a solution at that, although a little more expensive than the alternatives, is more flexible than CPUs and GPUs. It requires installing special chips in specific sequences and arrays in order to increase your computer’s hash-guessing ability.

As far as ASIC mining is concerned, what is worthy of note is that it is the most efficient of all thanks to the use of powerful and often custom-built equipment. These solutions are used by large, industrial miners, so their advantages are well-known by those with experience in this field. If you are a novice miner, you may want to start off with FPGA mining since it is the most flexible option of all and allows you to change your investment strategies with little cost, and you can always move up a tier to ASIC mining once you have the experience and capacity to benefit from the full array of features that ASIC mining provides.

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Benefits of FPGA mining

FPGAs are designed to consume less power than other integrated circuits, making mining a very profitable venture, especially in countries such as Sweden where electricity prices are lower. In addition to low power consumption, higher levels of customization when compared to commercial off-the-shelf (COTS) hardware mean FPGAs can be configured to compute different algorithms specific to different cryptocurrencies, thereby allowing miners to switch from mining one type of currency to mining a different type, depending on profitability ratios, with very little downtime.

Conclusion

Cryptomining Server Blog | BlockbaseMining is a very volatile enterprise to get involved in. Changes in prices and public sentiment, the high cost of participation, and fluctuating returns mean you may make a lot of money one day and a significant loss the next. However, because they are programmable and can be reused in many different ways once you’ve bought them, FPGAs are a great way to mine bitcoin and then experiment with other coins as well. At Blockbase, we can even help you calculate the profitability ratios of your mining initiatives so that you can see what you can earn mining with FPGAs and other hardware.

Blockbase’s wide range of low-cost, user-friendly, and highly secure services are tailored specifically for mining enthusiasts and crypto investors. We’ll help you learn what you need to know about mining cryptocurrencies and help you join the right mining pools to share computing power and mining rewards with others.

Ready to start mining? Check out our hosting rates, sign up and start mining today!

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