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What are ASICs in terms of cryptocurrency mining?

ASIC stands for application-specific integrated circuits. ASIC is a type of hardware developed for only a few specific tasks in two or three industries. For example, ASIC hardware utilizes microprocessors to get better results while cryptocurrency mining. AS PER REPORTS, the ASIC manufacturers create this hardware specifically for every currency. Therefore, bitcoin mining is only profitable with ASIC mining machines. Read more about bitcoin selling and buying in ekrona app login .

Suppose a company has specified an ASIC miner as an Ethereum miner, then the ASIC machine will mine Ethereum currency. ASICs are popular as cryptocurrency generators. You might wonder why these machines are unpopular cryptocurrency generators and why people also use graphic processing units. Graphic processing units are not developed for the sole motive of mining.

Moreover, a graphic processing unit is highly versatile in cryptocurrency mining. It can support the mining of every cryptocurrency. There are merely a few ASIC manufacturers in the industry; the only reason behind this is that creating an ASIC for the sole purpose of mining is a bit challenging. The efficiency of an ASIC in contrast to GPU when it comes to mining is thousands fold more.

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Understanding ASICs!

Graphic processing units are potential mining machines, but they are less efficient than ASIC. The only reason GPUs are less efficient than ASIC is that a Graphic processing unit can perform every task in a computer device. On the other hand, ASICs are single goal-oriented cryptocurrency mining, so they develop highly optimized processors according to the bitcoin algorithm.

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ASIC might only see potential in processing power and generating a high hash rate. However, an ASIC is also more energy-efficient than any GPU and CPU. Many specialized bitcoin mining hardware came and left, but ASIC is still standing its ground. Only a few developers are capable of creating ASIC mining machines.

Bitmain is the leading ASIC manufacturer; despite being the leading developer of ASIC, this company owns two of the largest bitcoin mining pools, ant pool and BTC.Com. Ant pool generated almost 18% of the blocks in the bitcoin blockchain in just the last six months.

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BTC.com contributed to creating 15% of the blocks on this blockchain. In short, Bitmain contributes almost 35% of the hash rate in the global bitcoin mining chain. These ASIC developers can efficiently govern 51% of the hash rate and mutate the information present on the blockchain.

Due to lesser ASIC manufacturers, the bitcoin mining industry is becoming more and more centralized. We need to welcome and open opportunities for more ASIC manufacturers to remove the centralization. If there are more than 20 ASIC manufacturers, it might weed out the centralized part of cryptocurrency mining.

Why need ASIC miners?

Since the arrival of ASIC miners, the profitability of bitcoin mining with any other mining machine is almost dead. Because large organizations and mining industries dominating this field use ASICs to mine BTCs.

Evidently, for a solo miner with GPUs, it is an impossible action to compete against these companies. But, on the other hand, ASICs have surpassed GPUs in every aspect like electricity consumption, processing power and many others. In short, today, ASICs are mandatory to mine your BTCs. Otherwise, you will have to become a member of a cryptocurrency mining pool.

If other miners start to use GPUs, it will decrease the difficulty of cryptocurrency mining and make bitcoin mining possible with GPUs. But by using ASIC machines, mining pools and mining farms can easily dominate over other miners and win each reward, and they will not choose to use GPUs for mining.

To set up a graphic processing unit as a mining machine, you need many GPUs. On the other hand, ASIC is a single machine and is handier than GPUs. You can carry an ASIC to different cities, but you cannot carry a GPU rig with you as it is cumbersome and large. The only major disadvantage of buying an ASIC is its market value and scarcity. Due to fewer developers and manufacturers, these machines’ supply remains short.

The portion mentioned above is everything you should know about cryptocurrency mining.

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James Musoba
James Musoba
Studying Africa's startup and technology scene. I always look forward to discovering new exciting inventions and vibrant entrepreneurs.

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