What Is ASIC (Application-Specific Integrated Circuit)?
Also known as: Application-Specific Integrated Circuit, ASIC Miner, ASIC Mining Rig
In short
An ASIC (application-specific integrated circuit) is a chip designed to perform only one specific task. In the crypto world, it refers to mining devices that compute a particular hash algorithm with very high efficiency on Proof of Work networks such as Bitcoin.
In its early years, Bitcoin mining was done with computer processors (CPUs), then with graphics cards (GPUs) and, briefly, FPGAs. From 2013 onward, ASIC devices built only to compute SHA-256 came to market. Because these devices can produce many times more hashes with the same energy than general-purpose hardware, they quickly became standard in Bitcoin mining.
Each ASIC is specific to a particular algorithm: a device designed for SHA-256 works on networks such as Bitcoin and Bitcoin Cash, but cannot be used with the Scrypt algorithm used by Litecoin and Dogecoin. The efficiency of an ASIC is generally measured by the energy consumed per terahash (J/TH). Miners calculate profitability based on the device price, electricity cost, the network's total hash rate and the coin price.
Although ASICs increase network security, they are criticized for centralization because they have led mining to concentrate in large companies and in regions with access to cheap energy. For this reason, some projects have chosen ASIC-resistant algorithms; for example, Monero uses the CPU-friendly RandomX algorithm. As new generations of devices come out, older models can quickly become unprofitable.
Last updated: · This content is for information purposes only and is not investment advice.