Cryptocurrency mining used to be something you could do easily, but those days are long gone. Today, whether you’re mining Bitcoin, Litecoin, DASH, or a host of other cryptocurrencies, the most effective way to do so is with dedicated hardware known as an ASIC miner. And even then it’s only really for professionals with masses of capital to invest up front.
What is an ASIC miner? Short for Application-specific integrated circuit, the underlying ASIC chip is typically designed with a singular purpose, like audio processing or managing a cellphone call. In this scenario, it’s designed to “mine” a specific cryptocurrency.
What an ASIC miner actually does
In a nutshell, mining is the process of running complicated calculations in the search for a specific number. Mining hardware, whether it’s an ASIC miner or a GPU mining rig, must run through many calculations before finding that number. In proof of work systems like Bitcoin, the first one to find that number gets a reward — at the time of writing, 12.5 Bitcoins worth around $96,850. That reward will fall to 6.25 Bitcoins in May 2020.
There are so many people and powerful computing systems trying to mine Bitcoin that miner groups form to find that number and share the profit. Even more, the faster your hardware, the more you earn. That’s why people who can afford it opt for ASIC miners because it gives them the greatest chance of earning cryptocurrency in exchange for their investment.
Each cryptocurrency has its own cryptographic hash algorithm and ASIC miners are designed to mine using that specific algorithm. Bitcoin ASIC miners are actually designed to calculate the SHA-256 hash algorithm. In the case of Litecoin, it uses Scrypt. That means technically they could mine any other coin that’s based on the same algorithm, though typically people who buy ASIC hardware designed for Bitcoin mine that specific digital currency.
What makes an ASIC miner better?
When it comes to mining cryptocurrencies, what really matters is that the cryptocurrency you mine is worth more than what you spend on hardware and electricity. Those margins can be closer than you might think because mining cryptocurrency can be expensive. Hardware can be costly to buy upfront, and some of it can cost thousands of dollars a year in electricity to run.
When choosing mining hardware, having more efficient systems is incredibly important. That’s where ASIC miners come in. They differ from a graphics card or CPU mining system, which relies on components that are designed to perform more than just one task. Instead, ASIC miners are designed from the ground up to perform the calculations required by a specific cryptographic hash algorithm used by an individual, or handful of, cryptocurrencies.
Because of this single focus, they’re incredibly efficient, powerful — offering a high “hashrate” — and energy-efficient, using far less power than a mining rig with eight graphics cards might do for the same task. This combination of performance and low-power usage makes them much more economical to run than more general-purpose hardware.
In the case of Bitcoin and Litecoin, ASIC mining is just about the only way anyone mines those cryptocurrencies. You can now get Ethereum ASIC miners too, like Bitmain’s Antminer E3 that’s already out of stock.
How much does an ASIC miner actually cost?
Bitmain’s Antminer portfolio includes one of the most performing ASIC miners on the market. The S19 Pro can deliver 110 trillion hashes per second for a power consumption of 3,250W. The $2,400 price tag of this miner might make it too expensive for beginners.
Bitmain offers a more affordable version of the S19 at $1,785. This slightly less performing model delivers 95 trillion hashes per second. The Antminer T17+ costs a little over $800 and delivers 58 trillion hashes per second.
By comparison, a single GTX 1070 graphics card, which you can still find for $430, has a hash rate of 30 million hashes per second. Throw eight cards into a rig and you only have 240 million hashes per second for $3,440 at the least — that’s not including the chassis, motherboard, memory, power supply, and so on. Each card pulls at least 150 watts of power, too.
Ultimately, you want high performance at the lowest power cost possible. That’s where dedicated hardware like an ASIC miner excels.