History of Bitcoin Mining

As we mentioned in an articles before, mining equipment and technology grew and improved rapidly in the last years. While looking at the development and history of bitcoin mining equipment we are able to find reasons why mining is so successful and now a multi-billion dollar industry.

CPU Mining

When the first Bitcoin was mined in January 2009 by Satoshi Nakamoto, no specially designed technology and equipment was needed for that. The first Bitcoin was mined with an average personal computer, that contain a central processing unit (CPU). Because there were not many miners in the early days CPU devices processed enough computational power to create new blocks and earn mining rewards.

A new hardware was needed as the popularity of mining grew and new miners joined the Bitcoin network.

GPU and FPGA Mining

In October 2010, when the bitcoin price reached 10 cents, the first mining device leveraging graphics processing units (GPUs) was developed. A major innovation in mining hardware.

In comparison to CPUs, GPUs can only perform a limited number of computational tasks. They were originally built for gaming application but can also be re-programmed to compute other mathematical operations such as the ones needed to mine new bitcoin. Producing bitcoin blocks was now six times more efficient than before on CPUs.

In 2011 field programmable gate arrays (FPGAs) were also remodelled for the purpose of mining Bitcoin. They now can mine Bitcoin twice as fast as the highest grade GPU. Building these is way harder though, they need configuration on software and hardware level. The reason why they are better for bitcoin mining than GPUs is, the ability to adjust hardware components on an FPGA.

ASIC mining

The third major innovation in the to bitcoin mining industry happened in 2013.

That year the first application-specific integrated circuits (ASICs) was released. In comparison to the other devices named CPUs, GPUs and FPGAs, ASICs are only designed to mine Bitcoin and create new bitcoin blocks. The efficiency was never higher.