ASIC mining is currently one of the most popular ways of mining Bitcoin, and there are good reasons for this. While it is a newer mining option, it tends to have some benefits that previous mining iterations did not have. Namely, it is a more efficient method of mining cryptocurrency, and efficiency is essential in this field. ASIC stands for application specific integrated circuit, and it is a type of hardware whose sole purpose is to mine Bitcoins.
The chip is designed to utilize the SHA-256 algorithm to perform the mining operations, and in addition to the efficiency, it can provide the power needed for this endeavor.
The Need for ASIC
In the past, when Bitcoin was just getting started, the only way that it could be mined was through the power of a CPU. While this is still used by some people, it is an antiquated method that is inefficient and can often cause the user to spend more on their power usage than they are making with Bitcoin. Therefore, a better way was needed. This led to GPU mining, utilizing graphics cards, and then to FPGA, or field programmable gate arrays because they were more efficient. In some cases, these are still used, but they are still not as efficient as one might hope.
With the advent of ASIC, things changed dramatically. While the CPU and GPU were devices that could be used for multiple purposes, not merely mining Bitcoins, ASIC had just a single purpose. It was this focus on mining bitcoins that helped to propel it to the forefront of the options for cryptocurrency mining.
What Are the Pros of ASIC?
Just how much better is ASIC than the other methods? When you compare it with the power of the GPU, you will find that the ASIC devices are about 100 times more powerful. They are going to reduce the energy expenditures by around 7% when compared with the GPU, as well. It outperforms the other options, and it is natural that bitcoin miners are going to want to use only the best options for their mining.
The ASIC devices tend to outshine the competition in several ways. First, they can perform more hashes per second, they have reduced power consumption and therefore reduced costs to operate. They are also more flexible in their design. A range of options are available on the market today, as well.
How Does ASIC Mining Work?
Thanks to the power of ASIC devices, the complexity of the calculations has increased. With every increase in power by the miners, the complexity will continue to increase. This helps to ensure that the block rate discovery remains constant. The more powerful the device, the greater the potential profit for the miner.
The device allows the miners to audit previous bitcoin transactions, which helps to keep those who are using Bitcoins honest. When they verify the transactions, it helps to prevent an issue called double-spending, which simply means that the user is trying to spend the same money more than once. This is not a problem with physical currency, but it has been a problem with cryptocurrency. There is the risk that the Bitcoin holder could copy the digital token and spend it multiple times.
The miners, using the ASIC hardware, are essentially using those devices to audit the expenditures and to make sure everything is in order. Once they have verified 1MB of Bitcoin transactions, they have the potential to be awarded with small pieces of Bitcoin for their efforts. Not everyone who verifies transactions will receive a payment, and that is important to remember.
Naturally, the more transactions a person can verify, the greater the chance of receiving payment. For this reason, people are always looking for the best possible devices – ASIC in today’s world – to help them with their mining. By offering more power and more efficiency, it increases their potential profit.
In order to earn the Bitcoin, it is essential that you can meet two conditions, which the ASIC can help with. First, you need to verify that you have audited 1MB worth of transactions. In addition, you need to be the first miner to have the right answer to a numeric problem, which is called proof of work.
The numeric problem is not something that you have to solve on your own. You do not need to be a mathematical genius to do well with Bitcoin. All the work is done by the device. The device needs to arrive at a hash, or a 64-digit hexadecimal number that is equal to or less than the target hash. The device may not always arrive at the answer in time to be first. The more powerful ASIC devices available will have more power. The higher the hash rate of the device the greater the chance of being first.
You Need a Quality ASIC Device
If you do not have a powerful ASIC machine, you are not likely to make much from Bitcoin. These devices are an investment, but they can be a very good investment for those who want to delve into this field. Even with the cost of hosting and the power that they consume, it is possible to make money with Bitcoin mining. You just need to make sure you are researching the devices you are considering will have the power necessary.
Remember, the more power the ASIC device has the greater the potential for profit. With the value of a single Bitcoin currently at $14,780, it is easy to see why so many are interested in pursuing this avenue for money making. Even when the value drops, it is possible to make money when you have your devices in place and mining for you. There is an initial investment you need to consider, and it can cost thousands of dollars, but once you have everything in place, it can continue to provide your mining operation with a profit.