Application-Specific Integrated Circuit (ASIC) Miner

What Is an Application-Specific Integrated Circuit (ASIC) Miner?

An application-specific integrated circuit (ASIC) is an integrated circuit chip designed for a specific purpose. An ASIC miner is a device that uses ASICs for the sole purpose of “mining” digital currency. Generally, each ASIC miner is constructed to mine a specific digital currency based on their hashing algorithms. One way to think about ASICs is as specialized computers optimized to solve a cryptographic proof-of-work puzzle.

Because ASICs are built especially for mining cryptocurrency, they do it much faster than personal computers which might otherwise be considered powerful.

History of ASIC Miners

Cryptocurrency mining is required by a proof of work (PoW) blockchain like Bitcoin to carry out its operations. The mining process involves solving cryptographic puzzle by generating a hash until finding one with a value equal to or below the target difficulty number’s value. The first miner to find the solution to the puzzle has their block added to the blockchain. Each winner in the bitcoin mining competition receives a reward (a specific amount of bitcoin) along with the transaction fees for the transactions in that block.

In Bitcoin’s early days, any computer with adequate processing power could mine bitcoin. However, those days are long gone; in 2012, the first ASIC miner was introduced, attracting hordes of crypto miners.

As the network of mining machines grew, the mining difficulty increased because the network is designed to increase the difficulty when there is more computational power. This led to a race to harness the most “hashing power,” the term used to describe how many hashes per second a miner can generate (or the combined hashes per second of a networked mining rig or pool).

How an Application-Specific Integrated Circuit (ASIC) Miner Works

Instead of being general-purpose integrated circuits—like RAM chips, PC processors, or mobile device microprocessors—ASICs employed in cryptocurrency mining are custom-designed to mine cryptocurrencies by only generating hashes. The chips are designed to compute one or a few hashing algorithms. They are placed on an integrated circuit board (or many) and programmed to generate hashes.

Hashing

A hash is a long hexadecimal number, the result (output) of a hashing algorithm’s input. Blocks have a dedicated space called a block header that includes certain information. One of these fields is the nonce, or “number used once.” In another field, there is information about the transaction that will transfer the block reward to the miner, which is called the coinbase. The coinbase field also acts as an “extra nonce” field because it can hold more data. These two fields can be altered to generate different hashes.

To mine a block, the mining program changes the nonce and the extra nonce (usually both) to generate a new hash until a number less than the target hash is reached. This is called hashing. The more hashes that can be performed in a set period, the more likely a miner is to earn the reward.

Cooling

Hashing uses all of the computational resources in the ASIC miner, which generates a lot of heat. Heat generation inhibits efficiency. Heat slows down conductivity and can cause damage, so the machines use active cooling, such as heat sinks, large fans, or liquid cooling, to combat the heat. One ASIC mining farm, CleanSpark, submerges thousands of ASICs in non-conductive oil, which is cycled through a cooling process to maintain a specific temperature.

ASIC Miner Considerations

Before investing thousands of dollars in an ASIC mining rig, here are some factors to be considered:

• Coins it can mine: The list of cryptocurrencies that can be mined with ASICs is far smaller than those that can be mined with a GPU rig. Cryptocurrencies that can be mined with ASICs include Bitcoin, Litecoin, and several others.
• Rig location: Though GPU mining rigs can be located in one’s home, ASIC miners are louder and generate much more heat. This means that one’s home is not ideal for an ASIC miner, and alternate locations like a basement or garage with cooling need to be considered.
• Power consumption: The latest generation of ASIC machines is more energy-efficient than GPU rigs but consume tremendous amounts of power nonetheless. An ASIC miner based in one’s home may necessitate upgrading the electrical wiring system to handle the increased power load and additional cooling.
• Choosing a Bitcoin mining pool: Mining pools enable miners to combine the power of their ASIC miner rigs to mine bitcoin and share the rewards for successfully minted blocks. Factors to be considered when choosing a pool include its reputation, size, and payment rules.
• Return on investment: The return on investment may not be sufficiently high enough to justify the upfront cost of an ASIC miner and ongoing operating expenses.

The Bottom Line

Application-specific integrated circuit mining machines are built to generate hashes for cryptocurrency mining. They are orders of magnitude faster than central and graphics processing units in this respect and have taken over minable cryptocurrency networks.