What is CPU Mining? Is CPU Mining Still Profitable?

Introduction

Opportunities in the blockchain sector are expanding along with it. One of the numerous options offered by blockchain has been mining. It entails solving challenging mathematical equations to validate transactions on a block in exchange for a cryptocurrency.

This procedure also makes it easier for the ecosystem to produce new coins. The variety of methods/ channels used to mine cryptocurrencies also diversifies as the crypto business grows. This article carefully examines how CPUs are used to mine cryptocurrencies, its profitability, and the alternatives that are available.

Bitcoin: The First Coin to Use CPU Mining Concept

The significance of CPU mining in the crypto industry can be traced back to its usage in mining the genesis blocks of Bitcoin by Satoshi Nakamoto. This was a total of 50 coins as far back as January 2009. As the pioneer cryptocurrency, Bitcoin used CPU mining in its early days to enhance circulation and validate transactions.

CPU mining of Bitcoin was possible because of low adoption and lesser competition at the time. As a result, the profitability of mining was considerably higher. However, the growth of Bitcoin has necessitated the usage of other more effective mining methods compared to CPU mining.

What is CPU Mining?

CPU mining is the use of the regular central processing unit (CPU) of a computer system to mine cryptocurrencies. This is done by solving complex algorithms by the arithmetic and logical unit (ALU), which validates transactions and earns a reward for the miner. Proof-of-Work (PoW) is used in CPU mining to demonstrate job completion. Standard desktop or laptop computer hardware are used in CPU mining to mine digital coins that are saved using cryptocurrency custody software. It can also be done in a CPU mining setup, in which the miner outfits with components like a cooler, processor, motherboard, RAM, and other things to increase productivity. Additionally, some miners combine the strength of several CPUs to increase productivity.

CPU mining is very easy to start and a great way to earn passive income. It depends on two capabilities; hash rate and power efficiency (hash rate is measured in hash per second, and a great CPU can do 8-20kh/s). A CPU miner can mine solely or join a pool. Solo mines are more rewarding than joint pools; however, combined powers bring more effectiveness.

A CPU mining rig risks damage from unsafe temperatures and is vulnerable to bot networks. Moreover, it can't mine most cryptocurrencies because of the competitive hash rate. Cryptocurrencies that can be mined through CPU include coins that are generated based on the CryptoNote team’s idea - making mining accessible for everyone despite the effectiveness of their computing equipment- coins in this regard include bytecoin, monero, garlicoin, electorneum, dogecoin, grin, and other coins outside this such as dash, hatch, litecoin.

What makes good CPU Mining?

All computer parts aren't created with the same qualities and components, and such is the CPU as well. There are specific components to look for in finding an ideal one to mine cryptocurrencies, and these include:

Higher cores
Multi-threading capabilities
Low power usage
Top-notch coolant
High clocking speed

Some recommended CPUs for mining coins include:

AMD Ryzen 3 3100
Intel Pentium Gold G-6400
AMD Ryzen Threadripper 3970X
Intel core i9- 10900X
Intel Celeron G5905

Tips for Maximizing CPU Mining

Get a cooling system to keep your system within safe ranges of temperature.
Be sensitive to cryptocurrency mining scams.
Reduce workload on the CPU to control the heat it generated
Clean systems regularly to clear off clogged-up dirt due to temperature.

Is CPU mining still profitable?

The significance of CPU mining in the crypto industry can be traced back to its usage in mining the genesis blocks of Bitcoin by Satoshi Nakamoto. However, as the cryptocurrency industry grows and mining becomes more competitive, the use of CPU in mining has become less effective, especially in mining highly graded coins like bitcoin and ethereum. As a result, it has eventually been taken off bitcoin cores.

Generally, the profitability of CPU mining depends on projects and CPU configuration. Hence, the less competitive a crypto project is, the more profitable CPU mining gets. Likewise, the higher the CPU configuration, the better its effectiveness in mining. However, miners switched to graphic processing units because CPUs cannot solve complex equations repeatedly and effectively.

Alternatives to CPU mining

ASIC mining: this is fully known as Application Specific Integrated Circuit mining. They are specialized for a purpose. They can mine any cryptocurrency except the ASIC-resistant crypto. They generate a hash rate in terahashes per second, and miners can generate 90-100 th/s.

GPU mining: Also called Graphic Processing Unit Mining; it can serve more than a purpose against the ASIC hardware and have more than one ALU, unlike CPU. They solve complex cryptographic equations, and users can achieve this with affordable and available hardware like laptops. Nvidia RTX 3080 computer 100mh/s, and it's one of the best GPUs for mining.

Final thoughts

CPU mining involves the use of a CPU to mine cryptocurrencies. However, the increased competition between miners has made it less effective to mine highly-valued coins. Although there are coins that are generated explicitly so CPU miners can mine with less competition, some ASICs have also been developed to mine these coins, making them less profitable. This doesn't mean that CPU mining is not profitable at all. It is, but for newly generated coins and long-term profits. Active miners wishing to go into mining full-time depend on more effective methods than CPU.

Disclaimer

This article should not be taken as financial or investment advice. Making an investment or financial decision is a choice. Do your research!

About BIT

BIT is a full-featured cryptocurrency exchange that is designed for use by professionals. It provides services such as the execution of trading strategies, price discovery, and liquidity provision. BIT is always working to encourage the creation of innovative new financial products, improve the trading tools available to users, and offer a wide variety of tokens. Trade with confidence knowing that the platform is built with institutional-grade security and risk management measures in place. Sign up for BIT and switch on your future.