ETH Mining: Lower VRAM GPUs to be Rendered Unprofitable in Time
Hold on to your ETH hats: you will still be able to cash in on the ETH mining craze for a while. However, you should look towards your 3 GB and 4 GB graphics cards with a slight distrust, for reasons that you should know, anyway, since you have surely studied your mining cryptocurrency of choice. Examples are the GTX 1060 3 GB, or one of those shiny new 4 GB RX 480 / RX 580 which are going at ridiculously premium prices right now. And as a side note, don't you love the mechanisms of pricing and demand?
The problem here stems from ETH's own design for its current PoW (Proof of Work) implementation (which is what allows you to mine the currency at all.) In a bid to make ETH mining unwieldy for the specialized silicon that brought Bitcoin difficulty through the roof, ETH implements a large size data set for your GPU to work with as you mine, which is stored in your GPU's memory (through the DAG, which stands for Directed Acyclic Graph). This is one of the essential differences between Bitcoin mining and Ethereum mining, in that Ethereum mining was designed to be memory-intensive, so as to prevent usage of ASICs and other specialized hardware. As a side-note, this also helps (at least theoretically) in ETH's decentralization, which Bitcoin sees more at risk because of the inherent centralization that results from the higher hardware costs associated with its mining.
The problem here stems from ETH's own design for its current PoW (Proof of Work) implementation (which is what allows you to mine the currency at all.) In a bid to make ETH mining unwieldy for the specialized silicon that brought Bitcoin difficulty through the roof, ETH implements a large size data set for your GPU to work with as you mine, which is stored in your GPU's memory (through the DAG, which stands for Directed Acyclic Graph). This is one of the essential differences between Bitcoin mining and Ethereum mining, in that Ethereum mining was designed to be memory-intensive, so as to prevent usage of ASICs and other specialized hardware. As a side-note, this also helps (at least theoretically) in ETH's decentralization, which Bitcoin sees more at risk because of the inherent centralization that results from the higher hardware costs associated with its mining.
