The Ethereum mining situation is very interesting from the view point
of computer architecture. The idea of bitcoin variants mining is to
encourage people to provide computing power to keep the public ledger
honest by preventing people from erasing transactions and spending coins
more than one time. It is a solution to the multi-party secret sharing
problem with the amazing observation that fairness can be provided
by making sure the majority of computing power is honest. Before
Bitcoin, the idea was to make sure the majority of parties involved in
the multi-party sharing were honest.
It turns out that bitcoins are am improved way to stop cheaters
(code breakers) but is not fool proof either. Here is the
original design document by the originator of the Ethereum coin with
a discussion of preventing ASIC use and fixing problems with Bitcoin.
On Mining - Ethereum Blog
The problem with bitcoin mining is that it is too easy to design
an ASIC that can perform the SHA256 hashes. Mining works by hashing
and then collecting a coin if the hash is small enough. Currently
less than 2*191 (75 leading 0 bits). There is no better algorithm.
The way Ethereum eliminated the advantage of cheap ASICs (the Vitalik
Buterin article above has interesting pictures of the 2014 Bitcoin
ASIC factory in China) is to require the entire Ethereum coin ledger
be stored (gigabytes of data) and making the mining operation more like
a normal computer program that requires a real computer.
Here is an article from 2013 describing why the AMD graphics
processors architecture made it more economical (faster gpus for
this application) to use AMD GPUs in graphics cards than Nvidia.
AMD destroys Nvidia at Bitcoin mining, can the gap ever be bridged? - ExtremeTech
Basically, the AMD cards were much closer to normal computers while
the Nvidia cards were more highly optimized for graphics display.
One main advantage of the AMD card was that it contained a rotate instruction
that took 3 instructions on the Nvidia card of the time. It turned out
that back then too, AMD graphics cards sold out, but it was bad business
for AMD because when they ramped up production, the Bitcoin mining
algorithms had moved on. I think AMD and NVDA will run into the same
problem this time, i.e. bad business as technology moves on.
Here is a recent article explaining why AMD cards are faster (more
cost effective) because their architecture is more like that of a
normal CPU.
Ethereum Mining GPU Hashrate Performance Roundup
I do not understand the attraction of Bitcoin type public ledgers because
they can be beaten with various attacks and when such a hack happens,
there will be no legal system to turn to (attacks are discussed in
Buterin's blog post above).
