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Machines for Mining the Bitcoin Gold Rush

Posted by Andrew Back on



There's a new gold rush, but this time the tools of choice are algorithms and HDL skills instead of pick axes and pans, and machines not people are doing the mining.

Bitcoin, the decentralised digital currency, has barely been out of the news of late and in recent days it reached a new high value of $266 before proceeding to plummet to under $100 — an event which has been attributed to a significant surge in interest and much increased media coverage.

The Bitcoin Project describe bitcoin as an “experimental digital currency” and there are exchanges and payment processors, along with vendors who accept the currency. However, some are going as far as treating it as an investment; a bitcoin hedge fund exists and even derivatives.

In place of a central organisation the virtual currency is built upon peer-to-peer (P2P) networks and clever use of cryptography, that together provide evidence of work done by machines, which in turn translates into bitcoins for those operating them.

Next we'll take a look at four different ways of mining bitcoins.



At 0.2 million hashes/second there are much better uses for your Raspberry Pi

Using a general purpose processor for bitcoin mining may have been cost effective at one point in time, but as of now it's mostly considered to be a waste of hardware and electricity. To give an example, a respectable six-core AMD Phenom II X6 1100T processor clocked at 3.82GHz benchmarks at 22 million hashes/second. This may sound impressive, but as we'll come to see, these days it really isn't.



Bitcoin mining using GPUs provides a marked performance improvement and with an AMD Radeon 6990 you could expect to achieve 750 million hashes/second. However, graphics cards with 3,072 ALUs don't come cheaply and if you invested close to £500 on such a card, when you factor in the cost of the rest of the hardware and electricity — the GPU alone can consume up to 450 watts — would you see a return? Perhaps not.



Using FPGAs is where it starts to get interesting and while a bitcoin mining board such as the X6500 Rev 3 only delivers at peak 400 million hashes/second, it does this while consuming a much more environmentally friendly and cost effective 17.2 watts. Put together a cluster of 20 of these boards and you have a pretty decent mining rig with a theoretical performance of 8,000 million hashes/second, that consumes less power than a single Radeon 6990 GPU.

FPGA-based bitcoin mining hardware certainly ruled the roost for a while, however, as one might have predicted attention has now shifted to custom ICs.



A company called Avalon have become the first to ship an ASIC-based bitcoin miner and this delivers a whopping 66,300 million hashes/second for only 620 watts power consumption, and all while costing only $1,299. However, there is a catch: you had to be in there early to get one, and a machine from the second production run and that cost $1,499 went on to exchange hands for $20,600. As crazy as this may sound, it's been suggested that the new owner will recoup their expenditure in a reasonably short time frame — that is provided the currency doesn't crash.

Other vendors have announced ASIC-based miners and Avalon have talked of a second generation chip. It will certainly be interesting to see what impact this technology has, and it could be that unless it becomes much more widely available most new wealth will be concentrated in a smaller number of people.

Money isn't everything

Bitcoin shouldn't just be about making money and as an experimental currency having fun is perhaps a more sensible objective. After all, it's still early days and you never know what's around the corner and technological or regulatory issues could cause the value of the currency to nose dive.

Andrew Back

Top image: an Avalon ASIC miner PCB assembly.




  • andrew back Avatar andrew back

    Posted by andrew back at

    Hi Michael,

    Thanks for the comments!

    I think Bitcoin is interesting for many reasons other than the opportunity to get in early and accumulate wealth. It has a lot of people across the board, from governments, through finance and to technology, talking about it and thinking about the implications of cryptocurrencies. Although I agree that there are questions concerning actual utility, use of resources and greed, but I wouldn't go as far as saying that "The ethics of Bitcoin make the worst excesses of investment banking look almost honourable" — that's much too far a stretch for me!

    It will be fascinating to watch this unfold, whether Bitcoin becomes a sustainable, alternative global currency, or we look back in years to come at the madness of something which collapsed and left us with a most curious legacy of ASICs and machines that have no longer have any purpose.

  • michaelkellett Avatar michaelkellett

    Posted by michaelkellett at

    I always feel that the whole Bitcoin Mining thing is rather against the spirit of opensource-ness, it's a massive waste of resource in hardware, electricity and effort to prop up and attempt to make money out of a speculative bubble. The ethics of Bitcoin make the worst excesses of investment banking look almost honourable.

    I do notice that Andrew said it should be about more than making money but couldn't the same intellectual effort go into somemthing useful ............... or even something harmless ?

    Thanks for the post Andrew.


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