The future of mining of many leading cryptocurrencies is rather uncertain in the long term. As the number of Bitcoin users increases and as more coins are produced, mining becomes more complex and expensive. In addition, Bitcoin’s architecture provides a gradual reduction in the reward for each generated block. Ten years ago miners received 50 Bitcoins per one block, but as every new 210,000 blocks (approximately every 4 years) appear, this amount is reduced in half. Mining is also affected by electricity prices, as it requires a lot of energy, and the cryptocurrency market conditions in general.
What`s ASIC and what problems does it solve?
As the complexity of Bitcoin blocks generation increased, it became no longer profitable to mine this virtual currency using graphic cards (GPU-mining) or processors (CPU-mining). More processing power was required to make calculations, so the first equipment, specially designed for Bitcoin mining appeared in China around 2012. These were ASIC-miners. ASIC stands for “application-specific integrated circuit”. In fact this technology was invented long before cryptocurrency market, back in the early 1980s. At that time the British company Sinclair Research installed ASIC on personal computers to advance their graphic performance.
ASIC is a chip that performs a strictly defined type of work. That’s why it does its job better and faster than other chips that are responsible for solving multiple tasks. So, in our case, ASIC miners can calculate algorithms of particular cryptocurrencies blockchain much faster and much more efficient than graphic cards or processors, involved in many other activities. Currently it is no longer profitable or even possible to mine some digital currencies (first of all BTC) in any other way except ASIC. ASIC miners solve the problem of processing power lack, but here’s more to come. They also help reduce power consumption – the second major problem of cryptocurrency mining. One graphic card is usually not enough to ensure really profitable mining so miners need many of them which means they also have to pay a lot for electricity. ASIC miners can advance this process – they take less space, reduce electricity costs and increase processing power.
ASIC miners are blocks that include a frame, a cooler, an ASIC chip, a memory block, and connectors for external devices.
What to mine using ASIC-miners?
ASIC-miners were initially designed to mine Bitcoin and still are first of all associated with this virtual currency. However, later special equipment appeared that was able to calculate algorithms of other cryptocurrencies. Today users can mine a number of coins using ASIC-miners, for example:
- Bitcoin Cash, BitcoinDark, Namecoin (SHA-256 algorithm)
- Dash ( X11 algorithm)
- Ethereum, Ethereum Classic (Ethash algorithm)
- Litecoin, Dogecoin (Scrypt algorithm)
- Zcash (Equihash algorithm)
At the same time, some cryptocurrencies (for example Ethereum) can also be mined using graphic cards.
So, is it profitable?
Well, it’s not possible to calculate a general profitability rate of ASIC-miners, as it depends on a type of a device, cryptocurrency that is mined, electricity costs, etc. Rates of virtual currencies are rather volatile and unstable, which means that today it can take for example 6 month to get a payback of a couple thousand dollars spent on equipment purchase and related costs, while tomorrow one might waite for 1.5 years or more. One way or another, the “mining euphoria” is decreasing, and already in 2017 – the golden year for cryptocurrency industry – some began to talk about twilight times for mining. Today those who want to join ASIC mining have to make considerable investments which is basically too expensive for many users. Yes, there are still some Bitcoins to mine and other cryptocurrencies are also quite interesting. Indeed, mining is no longer the same as it used to be, but it’s not over yet. Anyway, before going down into a cryptocurrency mine and start extracting digital coins, you’d better consider if it’s easier and cheaper just to purchase some.