The Heck is ASIC?
This article is part of our “Mining the Digital Gold” epoch.
It used to be possible to mine for Bitcoins on your old laptop, however due to the constantly increasing difficulty it’s no longer practical on computers, not even with multiple high-performance graphics cards, so then how on earth can we do it? Allow me to introduce ASIC.
ASIC is an acronym that stands for application specific integrated circuit, meaning it is basically a circuit board designed to do something very specific. The “specific thing” that it’s trying to do is attempting to solve a blockchain problem. Today I am not going dive into how the blockchain problem works and how to solve it, but instead teach you about ASIC.
Firstly, there are two things that you need to know:
1. There are many different blockchain problems
A blockchain can choose any problem that it wants for its proof-of-work mechanism. For example, bitcoin uses Sha-256 and Ethereum uses Eth hash, and each of these problems are essentially a bunch of math. In a nutshell, you’re telling your computer or circuit board to do a bunch of math until it figures out something, and the first one to solve the problem wins a reward for trying.
2. Each blockchain problem can be optimized
For example, on a low level problem, you might find a way to do addition problems really quickly. But then if someone presents you with a bunch of multiplication problems you’ll have to be creative and find a way to optimize all of those multiplication problems. An ASIC is just a circuit board that has been designed to perform a certain hash (addition problems or multiple problems), which is actually the technical term for the blockchain problem and its goal is to do that as fast as possible and as efficiently as possible.
ASIC’s Pros and Cons
Nowadays most coins are mined using GPUs, which are the graphic cards in your computers that perform math to display the pixels on your screen in the correct manner. These GPUs are also really good at doing the math for some of the major cryptocurrency hashes for example in the past few years Ethereum has been “quite” profitable and because of this gpu prices have skyrocketed past their original MSRP (Manufacturer’s suggested retail price). To give you guys a perspective, my RTX 3070 that I bought three years ago for 800 dollars is selling on Ebay for 1500 dollars in the end of 2021. However, since Eth is moving to PoS aka. “Merge” in September and the recent crypto fallout, GPU prices have been plunging over the last few months. Now you can get RTX 3070 for 400 dollars or even less!
Unlike GPUs, ASICs are way more powerful at solving bitcoin hashes compared to a computer’s gpu solving those hashes. GPU still can do it but an ASIC at the same price can perform up to a hundred times faster with even less electricity usage. However, ASICs do come with some downfalls, ASICs are designed to be specific to one hashing function so for example an Innosilicon A11 Pro can only mine Ethereum using Ethereum hash and it can’t mine any other coin. So, if for some reason Ethereum hash is no longer profitable you can’t just direct your mining hash elsewhere, so you are just left with that a hunk of technology while with a gpu you can still play some pretty cool games on it. Another minor downfalls is that, these ASICs are usually very noisy and hot. This means you definitely don’t want to stick one in your bedroom because you might not be able to go to sleep at night.
Do you think ASICs are quickly becoming worthless in this recent crypto markets? Feel free to comment down below and let us know!
