Bitcoin ASIC Vs GPU: Which One Is More Profitable?

Published: 15th March, 2024 | Last Updated: 19th April, 2024

Hudson Kisia

Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

In this post I explore what are the differences between ASIC vs GPU mining for bitcoin and which is more profitable.

Application-specific integrated circuit (ASIC) and Graphics Processing Unit (GPU) are the two main types of hardware for Bitcoin mining. See my article explaining Bitcoin to really understand how mining BTC works.

Choosing either an ASIC mining rig or a GPU mining rig depends on many factors. Understanding these factors will enable you to make a better choice between the two.

Factors to consider in choosing your Bitcoin mining rig

Bitcoin mining illustration
Bitcoin mining illustration

The following are the various factors to consider:

1. Hash power

Hash power is the rate at which cryptographic computations are churned out per second. This hash power is measured in terms of hashes per second (H/s). Hash power is also known as hash rate. Typically, for CPU miners, this is expressed in terms of Kilo-hash per second (KH/s), while for GPU miners this is expressed in terms of Mega-hash per second (MH/s). For advanced Field-Programmable Gate Arrays (FPGA) this is typically expressed in terms of Giga-hash per second (GH/s). For ASIC miners, this is expressed in Tera-hash per second (TH/s). Nonetheless, low-power FPGAs share the same rating that of a CPU or GPU. Sometimes Solutions (Sols) instead of Hashes are used e.g., Sols/s, KSol/s, MSol/s, GSol/s, TSol/s, etc.

The main difference between the field programmable gate arrays and any other computing device mentioned herein is not the hash power but how FPGA building blocks, that is, logic gates, are programmable. This is unlike CPU, GPU, and ASIC devices whose logic gates cannot be reprogrammed after leaving the factory.

In terms of hash power, the choice of a mining device is not so much about its hash rate but about the hash power required to mine the chosen algorithm. A simple algorithm such as that used to mine Monero doesn’t require a high hash rate and thus can be mined using a low-powered device such as a home computer. On the other hand, complex algorithms such as that of Bitcoin require devices with high hash power such as ASIC mining rigs.

2. Electricity consumption

High hash power requires higher energy consumption. Thus, if you are in a situation where energy availability is constrained – either by high electricity costs or by limited quantities, you would have to go for low-energy devices such as CPU miners and GPU miners.

On the other hand, if electricity costs are low, you will be more inclined to go for those devices with high hash rates such as high-end FPGAs and ASIC devices.

In essence, this will also influence your choice of cryptocurrencies to mine and the mining method. This is more so, bearing in mind, the need for profitability.

3. Profitability

If you are in the crypto mining business, you are in for profit. You want as much profit as your money can buy. You can only be limited by the affordability of your mining venture.

Profitability is a complex factor. The following are the key elements that you need to balance out to optimize profitability:

  • Hash power – mining some coins Monero doesn’t require hash power to be profitable while others such as Bitcoin require very high hash power to be profitable. Yet, mining rewards for mining a bitcoin are hundreds of times more than those of mining a Monero coin.
  • Electricity costs – this is the main expense incurred during the mining process. Thus, lower electricity costs mean higher profitability.
  • Capital costs – The cost of capital is measured in terms of interest rate. Thus, when you buy a crypto mining rig, there is an interest element that you sacrifice. Your earnings should be higher than the interest rate sacrificed for your mining venture to be profitable.
  • Productivity – this is about how much output you can gain from a given input. The ratio of output to input is a measure of efficiency. On the revenue side, it refers to how much mining rewards you can gain from a given hash power. The higher the mining rewards per given hash power, the greater the productivity. On the cost side, it means how much hash power you can get from the input costs (mainly, electricity costs). Higher efficiency results in greater profitability.
  • Method of mining – there are three main mining methods; solo mining, pool mining, and cloud mining. Each of these three methods determines how much capital costs you will incur and also how much share of profit you get to keep.

4. Affordability

Well, as much as you would like to reap the maximum profit possible, you will be constrained by how much you can afford.

For example, you understand that mining bitcoins is the most profitable venture. Yet, you find that you can only profitably mine bitcoins using an ASIC miner which is beyond your affordability. So, you will either opt for mining methods that can allow you to mine bitcoins using your GPU miner or FPGA miner. This means that the only viable method is to join a mining pool. Joining a mining pool means sharing the profit with others. Alternatively, you may do cloud mining where you won’t need to buy a mining rig, but a huge chunk of the profits will be kept by the cloud mining service provider.

Thus, affordability will not only decide the type of mining device that you will acquire but also the mining method that you will use.

Why choose a GPU mining rig?

Nvidia RTX 4070 Graphics card for mining
Nvidia RTX 4070 Graphics card for mining

Why would you consider a Graphics card over ASIC hardware?

1. The compelling reasons

The following are key reasons:

  • Budget-friendly – a graphics card is several times cheaper than ASIC hardware. Thus, if you would have otherwise not carried out bitcoin mining for lack of funds, then, GPU mining is an affordable option.
  • General purpose – a graphics card can serve many functions including playing video games, video editing, AI computation, and ordinary work on a home computer. Thus, when you are not mining, you can still use your graphics card for other work.
  • Multi-coin mining – A bitcoin ASIC miner can only mine a SHA-256 hashing algorithm for bitcoins and bitcoin-related members. On the other hand, GPU miners can mine all kinds of cryptocurrencies.
  • Easy to explore new coins – Unlike an ASIC mining rig, a GPU mining rig is not designed to use a specific hashing algorithm, it can be used to explore mining new coins.

2. The drawbacks

Without a doubt, GPU miners have their limitations. The following are some of the drawbacks to consider when choosing a GPU miner:

  • Low hash power – as we have seen, GPU chips have several times lower hash power compared to ASIC chips.
  • Lower energy efficiency – even though a GPU miner consumes less energy, it is not as energy efficient compared to an ASIC miner. Thus, electricity costs per hash will be higher.
  • Less profitable – when it comes to bitcoin mining, GPU mining devices are less profitable. You can’t make huge profits from them. This is due to their lower hash power.

Why is an ASIC mining rig better?

Bitcoin ASIC miner
Bitcoin ASIC miner

ASIC mining devices are the latest inventions in the cryptocurrency mining industry, though not new.

1. The compelling reasons

ASIC mining rigs are better because of:

  • High hash power – compared to a graphics card an application specific integrated circuit has a higher hash rate and hence potentially higher mining rewards. Powerful ASICs are used in mining farms to carry out trillions of solutions per second (TSol/s).
  • Higher mining efficiency –unlike GPU chips, ASIC chips are designed to carry out the specific task of mining a specific coin based on a specific algorithm. This makes ASIC mining highly efficient since the circuit is highly optimized. On the contrary, a graphics card, initially designed for streaming video games, is general-purpose hardware not designed for the specific purpose of mining cryptocurrency.
  • Higher energy efficiency – since Bitcoin ASIC machines are predesigned to mine a specific cryptocurrency, their circuitry is optimized for that specific purpose. This is unlike the graphics cards that are optimized for graphics processing as opposed to the Bitcoin mining process. Thus, when it comes to Bitcoin mining, the productivity of the graphic cards of computers is comparatively low due to this lack of circuitry optimization. Unoptimized circuitry has lower energy efficiency since less power is utilized toward the specific purpose such as carrying out complex mathematical calculations which is typical of mining cryptocurrency.
  • Ease of use – designed to execute a particular algorithm for mining a particular cryptocurrency, they come as plug-and-play devices. This makes it easy for new miners to easily and quickly get started since the most complex tasks of assembling, configuring and installing software are already done at the factory level.

2. The drawbacks

Despite their immense hash power, ASIC machines have their drawbacks. The following are some of the cons of ASIC mining devices that you should factor out:

  • High price tag – the price of ASIC miners is several times higher than that of GPU miners. Thus, if you have budgetary constraints, then, they may not be your best choice. Nonetheless, instead of buying a new ASIC miner, you may consider a used and refurbished Bitcoin ASICs from the secondary market.
  • Single algorithm – while ASICs have the big advantage of high hash power efficiency, they may not be suitable for small-scale crypto miner who would like to diversify their mining portfolio by mining many different types of cryptocurrencies at a low capital budget. In such a case, field programmable gate arrays could be the better option.

Up Next

Bitcoin Mining CPU Vs GPU: Which One Is Best?

bitcoin mining cpu vs gpu

In this article, I will compare CPU vs GPU for Bitcoin Mining. While I will only focus on these two processing units you should be aware that neither is considered the most efficient at mining bitcoin. In fact, the best choice for mining Bitcoin is to use Application specific integrated circuits (ASICs). However, if you really don’t want to use an ASIC then you are either going to have to go with a CPU or GPU. Out of the two GPUs are the better option. Let’s take a close look at each. Read more.

Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

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