Ethereum ASIC Miners Are Here, But What Are They?
With the recent announcement of Bitmain’s “Antminer E3,” ASIC miners are on everyone’s mind in the Ethereum community. From the start, Ethereum intended to be an ASIC-resistant cryptocurrency. It’s looking like that may no longer be the case. But what exactly are ASIC miners, and why does everyone care so much? Well, let’s break down what they do and why they matter—especially for Ethereum—below.
Mining Difficulty Increase
In the good ole’ days of mining, you could mine cryptocurrencies in your college dorm room with a simple set up. If the currency was still in its infancy, you may have been able to mine with your CPU (even a laptop in some cases!), but times have changed. Today, mining most major cryptocurrencies is so difficult that it requires a significantly larger operation. That gives miners a few different options.
Mining Pool: One of the most popular choices for miners has been pooling resources together. Instead of simply mining away on their own, they would collectively mine. By “pooling” resources, crypto miners were able to increase their chances of having consistent returns. This gained massive popularity.
Larger Rigs: This next option included just building more onto your mining rig. If you’re already familiar with how to build a mining rig, then you know the number of GPUs is key. Miners can add on more GPUs to their system for increased power.
ASIC Mining: The last one here on the list, ASIC miners, often solicits different responses from the community. Though ASIC miners tend to be more expensive in the beginning, they are more efficient to run and are often used to crowd-out already-established GPU mining operations.
ASIC Miners vs GPU Miners
So what’s the big deal, anyway? Why do so many people dislike ASIC miners in the crypto space? To better understand this, we first need to understand how the two miners operate differently.
GPU Miners: It should be noted that GPU mining used to be the sort of “ASIC” mining way back in the day (think 2009-2010). After all, graphics processing units (GPUs) really are a type of ASIC. The difference between GPUs and regular ASIC miners is that GPUs were designed for another purpose: handling gaming, 3d animation, modeling, etc. not mining. GPUs offer substantially more processing power for hashing than CPUs, so naturally they gained dominance. Though the GPU is a far better fit for mining than the CPU, it still wasn’t purpose-built for mining. GPUs happen to be very adaptable and have a wide variety of uses, so this worked to their advantage. But can they be beat?
ASIC Miners: The short answer is a yes, by the way. That’s where ASIC miners come into play. The acronym ‘ASIC’ stand for “application-specific integrated circuit.” That means that the hardware itself is built for a very specific function. It does that function very well, but doesn’t really do anything else (at least not well). ASIC miners are hardware built with the sole purpose of hashing for a specific cryptocurrency. Because of the nature of the machine, they offer a much more efficient mining experience. ASIC miners are now what controls the majority of Bitcoin mining, and have forced most of the GPU miners out of the market.
Explain-to-me-like-I’m-5 (or 21)
To use an analogy, think of opening a bottle of wine or beer. If you’ve ever been out camping without a bottle opener or corkscrew, what are you to do? Sure, there are definitely other ways to go about opening a bottle of wine or beer, but are they the easiest? No, they’re not. You can always use a key on the cork for the wine bottle, maybe find something around the campsite for leverage for the beer, but none of the ways are as efficient as a corkscrew or bottle opener.
We definitely have specialized tools to handle certain tasks, there’s no doubt there, but those tools aren’t as versatile. For example, if you ended up opening a bottle of wine with a shoe or car key (yes, it can be done), there are other uses for those objects. But with a corkscrew, its only use is really for opening wine bottles. That’s fine if that’s all you’re using it for and since it’s pretty low-cost, but what if it’s not?
In the example, ASIC miners are like the corkscrew and bottle opener and GPU miners are something you happen to find to use. After you’ve opened the bottle (or mined the cryptocurrency), what other use does the object have left? ASIC miners have no other real-world purpose (sell it for parts, maybe?) but the GPUs do.
The other difference? ASIC miners are much more expensive than a corkscrew (starting at $800/unit).
Community Response and What Does That Mean for the Future?
The Ethereum community is not too crazy about the idea of ASIC miners making their way to the scene. The main reason for the skepticism and prejudice against the hardware is that it can lead to a consolidation of hashing power and centralization of mining output. Because of that, there is some serious consideration in the Ethereum community to seek a hard fork. A hard fork would change the Ethereum protocol and could potentially render the new ASIC miners useless.
Right now, we’re still not sure how effective Bitmain’s new ASIC miners will be on the Ethereum platform in terms of performance. Because of that, the community is still waiting on the sidelines to see what the outcome will be when ASIC miners start shipping in the summer. Looks like we’ll have to stay tuned.