What Is an Application-Specific Integrated Circuit (ASIC) Miner?
An application-specific integrated circuit (ASIC) is a type of circuit that has been designed for a single specific purpose. An ASIC miner refers to a device that uses microprocessors for the sole purpose of "mining" digital currency. Generally, each ASIC miner is constructed to mine a specific digital currency. So, a bitcoin ASIC miner can mine only bitcoin. One way to think about bitcoin ASICs is as specialized bitcoin mining computers, or “bitcoin generators," that are optimized to solve the mining algorithm.
Developing and manufacturing ASICs as mining devices is costly and complex. Because ASICs are built especially for mining cryptocurrency, they do the job faster than less powerful computers. ASIC chips for cryptocurrency mining have become increasingly efficient, with the latest generation operating at around just 29.5 Joules per Terahash.
- An application-specific integrated circuit (ASIC) miners are electronic circuits designed for the sole purpose of mining bitcoins or other cryptocurrencies.
- In general, an application-specific integrated circuit (ASIC) is optimized to compute just a single function or set of related functions.
- Bitcoin miners review and verify previous bitcoin transactions and create new blocks so that the data can be added to the blockchain.
Understanding Application-Specific Integrated Circuit (ASIC) Miners
Instead of being general-purpose integrated circuits—like RAM chips or PC or mobile device microprocessors—ASICs employed in cryptocurrency mining are specific integrated circuits designed solely to maintain the bitcoin blockchain—a public shared database that stores digital information.
Originally, bitcoin’s creator intended for bitcoin to be mined on central processing units (CPUs)—your laptop or desktop computer. However, bitcoin ASICs surpassed both CPUs and graphics processing units (GPUs) in terms of their reduced electricity consumption and greater computing capacity. After first gaining traction in mid-2013 when other hardware mining devices started hitting their bottlenecks in mining, Bitcoin ASIC miners have retained their lead.
Bitcoin miners perform complex calculations, known as hashes. Each hash has a chance of yielding bitcoin. The more hashes performed in a set period of time, the more likely a miner will earn bitcoin. ASIC miners are optimized to compute hash functions efficiently.
Although investing in cryptocurrency can be costly, and only sporadically rewarding, some investors are drawn to it. People buy expensive ASICs and pay for high electricity bills so that they can earn bitcoin.
In the context of blockchain, digital information (stored in a “block”) is recorded in a public database (the “chain” of subsequent blocks). The bitcoin protocol is built on the blockchain.
What Is Bitcoin Mining?
Mining is the process of managing the blockchain and also creating new bitcoins. The job of bitcoin miners is to review and verify previous bitcoin transactions, and then to create a new block so the information can be added to the blockchain. The mining process involves solving complex mathematical problems using intrinsic hash functions linked to the block that contains the transaction data. Various bitcoin miners compete intensely with each other to solve a necessary mathematical puzzle.
Many miners join a mining pool to increase their chances of earning bitcoin. Mining pools pay for high value hashes, known as shares.
The first miner to find the solution to the puzzle is able to authorize the transaction, or add the bitcoin to the block. Each winner in the bitcoin mining "lottery" receives a reward (a certain amount of bitcoin). The reward includes all of the transaction fees for the transactions in that block, which motivates miners to collect as many transactions into a block as possible, in order to increase their reward.