Babbitt Original | FPGA mining machine is back, is it really profitable to use it to mine small coins?

FPGA mining machine, you may think that this is an old thing that was eliminated by Asic in 2013, but today, it has not only made a comeback, but in certain fields, it can be said to be very profitable.

Nervos is listed as one of the top ten domestic public chains in some rankings, and Bloomberg even calls it, Cosmos, and Polkadot the most anticipated public chains in 2019. On November 16, 2019, its mainnet was launched, and CKB surfaced.

CKB can be obtained through mining. Currently, Nervos does not have an Asic mining machine. Data from Spark Mining Pool shows that the top two mining machines with the best mining returns are FPGA mining machines. Among them, the daily net profit of Blackminer F1+ is 36.79 yuan, which is second only to Shenma Mining Machine M20S (62T). The third place is GPU mining machine.

Blackminer F1+, this FPGA mining machine produces 1063 CKB coins per day, with a daily net profit of 36.79 yuan at 0.4 yuan per kWh. The acquisition cost of a single CKB is about 0.00126 US dollars. If you buy it directly in the secondary market, the price today is 0.0062 US dollars, a difference of 4 times. Using FPGA mining machines to mine CKB is a huge profit.

The private placement price of CKB is 0.006 USD, and the crowdfunding price is 0.01 USD. An early investor once joked that if he knew mining was so cheap, he would just buy a mining machine to mine, so why bother investing.

What is FPGA mining machine?

The Chinese pioneered the FPGA mining machine, and the Asic era was eliminated

The world's first FPGA mining machine was born in 2013. Its creator was a Chinese named Nan Geng Zhang (Zhang Nangeng, founder of Canaan Creative). At that time, this 3,200 yuan machine was a heavy blow to GPU mining. Half a year later, Nan Geng Zhang revolutionized FPGA mining machines with Asic mining machines, and thus Bitcoin mining entered the era of high computing power.

FPGA mining machines use FPGA chips, which are field programmable gate arrays. You can simply think of them as being stronger than GPUs but weaker than Asic chips. In the field of mining machines, the investment in a single tape-out is tens of millions of RMB, so manufacturers will use FPGA for verification, and after success, they will invest large sums of money to purchase wafers to make Asic chips.

People who know about mining machines know that GPU mining machines can mine POW currencies of different algorithms, while Asic mining machines can only mine POW currencies of the same algorithm. For example, once a Bitcoin mining machine is eliminated, it can only be sold as scrap metal. But FPGA mining machines have a feature, they can mine POW currencies of different algorithms through upgrades! It's a bit like an upgraded version of GPU.

Let’s summarize several characteristics of FPGA mining machines.

First, its computing power is stronger than GPU. Second, its manufacturing cost is lower than Asic, and its manufacturing process and production cycle are faster than Asic, and it may be online in one month. Third, mining machine manufacturers can use software upgrades to allow mining machines to mine POW currencies with different algorithms. For example, SHA256, and the Scrypt algorithm that GPU mining machines are particularly good at. Fourth, the power consumption is relatively low. Fifth, especially for some algorithms with small memory requirements and pipeline processing, the advantages of FPGA mining machines are more obvious.

How come such a powerful miner was eliminated? Because after entering the Asic era, Asic mining machines have better energy efficiency and can bring more economies of scale.

FPGA is back, a powerful tool for small mining coins

Why can CKB use FPGA mining machines? What kind of currencies does FPGA have a natural advantage in?

Sanyi is a well-known influencer in the Bytom community and the founder of Niubiquan, a community website focused on discussing mining coins. He told Babbitt that his team has been developing strategies around mining coins, mining machines, and mining.

"We will definitely deploy FPGA mining machines, and we are currently researching mining machines and currencies." According to Sany, there are very few FPGA manufacturers at present. BlackBlock, which produces Blackminer F1+ mentioned above, is a well-known team, and most of the mining machines of this brand are currently futures. There are also some teams that produce FPGA mining machines for self-mining, but they are not on a large scale. "The development is not very sufficient." He said.

According to him, FPGA mining machines are suitable for the following scenarios.

First, it is suitable for small mining coins with a high market value after a period of time, such as a market value of tens of millions of RMB. The cost of deploying FPGA mining machines for such currencies is more reasonable. Small mining coins with a market value of only hundreds of thousands or millions of RMB in the early stage are not suitable for FPGA mining machines. On the one hand, a large number of small mining coins may die halfway, and the risk is too high. CKB is quite unique. It has a high market value when it is born. Coinmarketcap.com shows that its current circulating market value is about 77 million US dollars, ranking 60th in the world.

Second, there is a period when there are no ASIC mining machines for small mining coins. Taking CKB as an example, CKB is an ASIC-friendly algorithm, but it has been online for a short time and there are no ASIC mining machines yet. This gives FPGA mining machines a certain living space and time.

If you are optimistic about a small mining coin, but it is difficult to buy a large amount of mining coins in the secondary market, you can only mine it. Coincidentally, FPGA mining machines were the tools for mining small mining coins before the birth of Asci mining machines, that is, the tools for mining new small mining coins.

However, FPGA mining machines are not capable of mining all small coins that GPUs can mine, such as Grin. Grin is a memory-intensive algorithm, and the mining efficiency of FPGA mining machines is low, and the production difficulty is still very high.

“Even if there is, it is only a small amount produced and sold by ourselves. It is not suitable for large-scale sales, so Grin is still mainly GPU mining after a year of its birth. CKB is a computationally intensive algorithm, so FPGA mining machines have been the main focus since its birth.” said Tian Qi, head of the Grin Chinese community.

FPGA has a certain market space, but it is relatively niche, which may be one of the reasons why mining machine giants such as Bitmain and Canaan Creative have not entered the market.

FPGA mining machine, the morning star or the calamity star on the growth path of small mining coins?

We know that many currencies such as Polkadot and Cosmos have begun to adopt the POS algorithm, but in 2019, although small mining coins are niche, they are still quite popular in the market because many currencies with very high market value growth have been born.

In the field of POW, if a currency chooses to be ASIC-friendly, it will largely go through the development process from GPU to ASIC mining. The GPU period provides wide participation, and the ASIC stage uses computing power to ensure network security. This gives FPGA mining machines a certain living space.

In the "2019 Blockchain Mining Research Report" released by TokenInsight, it put forward 7 predictions for 2020, one of which is: altcoin mining may gradually move from GPU/CPU to FPGA, and in the long run it may slowly be taken over by ASIC mining.

At present, not only CKB, but also mining coins such as KDA, RVN (Ravencoin), DGB (DigiByte), and Tellor incubated by Binance and Consensys can be used for FPGA mining.

On the other hand, although FPGA mining machines provide a buffer for the arrival of Asic, the birth of FPGA mining machines will still have a certain impact on the price of small mining coins. For example, miners have no loyalty and sell as soon as they dig up. Once the market value management and mass base are not in place, the buying orders cannot take over the selling orders, and the price may continue to fall. In this vicious cycle, once mining has no benefits, miners withdraw, and the currency may end in misery. This kind of mining collapse is unlikely to occur in Bitcoin, but it may be fatal to some small currencies.

Can FPGA mining machines become a small hot spot in 2020? We will wait and see.