What are ASICs? Application of ASIC in Cryptocurrency Mining

What are ASICs?

ASIC or full name is Application-Specific Integrated Circuit, roughly translated as specialized integrated circuit, as the name implies, ASIC is an integrated circuit designed to serve a specific use case. .

Today, ASIC technology is applied everywhere, in many fields, such as mobile phone processors, automated machine processors, media, vehicles. vehicles, spacecraft, process systems, industrial lines, etc.

The importance of ASICs in mining PoW Coins and Bitcoin (BTC)

The essence of Proof of Work (PoW) is to confirm someone’s proof of “solution” is valid to the entire blockchain network, one of the first PoW Coins born was Bitcoin (BTC).

To better understand the nature & operation of Proof of Work, you can refer to: What is Proof of Work?

To mine bitcoins, users’ computers need to perform complex calculations, known as hashes, each hash has a chance to generate Bitcoin. The more hashes done in a given period of time, the more likely that miner will earn Bitcoins.

Initially, users mined Bitcoin on the central processing units (CPUs) of laptops or desktop computers. Over time, along with the development of Crypto (cryptocurrency) in general, the profitability of coin mining is also better so it attracts more and more participants, making Bitcoin (BTC) mining exponentially more difficult.

ASIC miners were born as a result of this process.

ASIC miners refer to a computerized device or hardware that uses ASICs for the sole purpose of “mining” Cryptocurrency. Generally, each ASIC miner is built to mine a specific digital currency.

To put it simply, a Bitcoin ASIC miner can only mine Bitcointhey are optimized to solve the mining algorithm.

Advantages and limitations of the application of ASIC in Cryptocurrency mining

Like other technologies, the application of ASIC in Cryptocurrency mining has its own advantages and disadvantages;

Advantages of ASIC

More efficient cryptocurrency mining: ASIC miner is specially designed for one purpose which is to mine coins. Therefore, the mining efficiency of these machines is very high, making it possible for investors to mine more coins in the same time period.

Make your network more secure: The competition for mining speed leaves ASIC manufacturers in constant competition with each other to create more efficient models. This makes the network more secure because the mining power is getting bigger and bigger, making the network cost too large and the profit not making up for the loss.

Disadvantages of ASICs

Great energy consumption: First, operating ASIC miners will consume a large amount of electricity, the replacement and maintenance costs of this excavator are also quite high. Sometimes these costs are higher than the value of the coins mined.

Limited use cases: While ASICs can be highly efficient, being restricted to a specific use case renders them completely useless for doing anything else. Furthermore, the constant technological advancements in the crypto space yielding new ASIC models quickly render old designs completely unprofitable.

Make the network less decentralized: The development of ASIC miners inadvertently gave rise to a new business that is Mining Pools, this mining model causes centralization of mining power, a threat to decentralization of Bitcoin.

In theory, the top four Mining Pools could work together to take control of the Bitcoin (BTC) network, the most secure Blockchain in the world today.

Some points to keep in mind when wanting to become an ASIC Miner

Since ASIC miners are also quite expensive, before deciding to spend tens of thousands of dollars on an ASIC mining rig, you need to consider a few factors:

• Which Coin do you want to mine?: The list of cryptocurrencies that can be mined with ASICs is much smaller than those that can be mined with a GPU. Popular cryptocurrencies that can be mined include Bitcoin, Litecoin, Ethereum and some other PoW coins.
• Where to install the excavator: ASIC miners generate a lot of heat when operating. This means that it is not a good idea to build a mining rig in your place of sleep because it will cause a lot of inconvenience. The ideal place could be like a basement or garage or you can rent a private room for this activity.
• Power system: The latest generation of ASIC machines consumes a lot of power. If you decide to become an ASIC miner at home, you should consider upgrading your wiring to avoid the worst-case scenario.
• Opt to join a mining pool: Mining pools allow miners to combine the power of ASIC miners to increase bitcoin mining and share rewards among participants. Instead of choosing to be a home miner, another option you can consider is joining a mining pool.

looking for more information: What is Mining Pool? How it works & Pros and cons of Mining Pool

summary

I hope this content will help you get an overview of what ASIC is? The importance as well as some advantages and limitations of the application of ASICs in cryptocurrency mining.