What Makes The ASIC Chip So Great For Cryptocurrency Mining?

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The easiest way to answer this question is that they are FAST. It’s all in the name: Application-Specific Integrated Circuit. “Application Specific” means that these chips are designed for only one purpose. ASIC manufacturers take the best that technology has to offer and customize it for one particular operation. In our case, that operation is solving hash algorithms for cryptocurrency mining.

What Exactly Is Mining Anyways?

Blockchain creates a permanent record of each transaction occurring within its network. The biggest challenge of cryptocurrency is in making a digital asset that can’t be tampered with or copied. Bitcoin solves that problem with cryptography. Each transaction is stored in a block that is linked to the rest with a cryptographic hash.

Hash functions are a standard method for identifying and verifying the contents of any data source. A hash function is not inherently difficult to perform. In cryptocurrency, however, the hash value is made very difficult to calculate, which regulates how many tokens can be produced at a given time, and makes it extremely difficult to falsify their records. Although the hash is made very difficult to calculate, it is effortless to use the results of the hash for verifying the data it protects.

Each block begins with the hash value of the previous block, which links them chronologically all the way back to the genesis block. The blocks also start with code for creating new coins as a reward to the miner for sealing it. To change any information within a block would require a network majority to re-calculate the hash of every subsequent block. Solving the hash is known as Proof of Work (POW), and that’s what is meant by mining.

An important feature of mining is that the difficulty of solving a hash is automatically adjusted. On the Bitcoin network, the difficulty is automatically adjusted to ensure that a new block is created approximately to every 10 minutes. Meaning that the more mining power there is on the network, the more difficult solving the hash becomes. Likewise, if there were less interest in mining, the difficulty would decrease.

In short, miners record transactions while working to solve a hash for identifying the information contained in a block. This system creates a permanent record of each operation within the network, and a reward for miners to continue maintaining it.

In The Beginning

When Bitcoin first arrived onto the scene, people mined with CPUs. The hash complexity low enough that anyone with a spare computer could do it. In those days, mining was mostly a charitable act done by hobbyists to support the network. In fact, the value of bitcoin was so low that mining often cost more in electricity than what it paid out in direct market value.

In 2010 the code for GPU mining was released to the public. As the difficulty of solving a hash increased more powerful hardware was needed, and GPUs were perfect for the task.


To understand why GPUs work so much better than CPUs, it’s helpful to know how each of them works. A CPU performs the executive functions of your computer. It has to handle permissions, virtual memory, and many other types of tasks. Not only does it have to perform a variety of functions, but it also needs to do be able to switch between them quickly. The design of a CPU places more importance on the ability to quickly switch between tasks than it does in optimizing for the peak performance of an individual function.

A GPU, on the other hand, is a laborer. It doesn’t need to worry about switching between different tasks. It needs to be able to do heavy work, over and over. That gives the GPU a significant advantage in raw processing power compared with the CPU. It also means that they are great for challenging repetitive tasks such as calculating cryptocurrency hash functions.

Before Bitcoin was even released, its inventor knew that maintaining the network would not always remain in the hands of the average user:

“At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware.” Satoshi Nakamoto, 2008

In 2013 ASIC chips became available for end-users. These chips contain silicon logic specific to performing a cryptographic hash algorithm. This is a distinct advantage compared with a CPU, or even a GPU, which have many more capabilities. To put it in perspective, the power of a single GPU today is approximately equivalent to 30 CPUs. On the other hand, a single ASIC chip can match the capabilities of 1200 CPUs. Let that sink in for a moment.

ASICs Are Good For Blockchain

A common complaint heard today is that ASICs make cryptocurrencies more centralized and vulnerable to attack. On the contrary, any currency that is minable by ASIC is much safer from a 51% attack. The concern of such an attack is that with enough hash power one party could obtain a network majority, double-spend coins, and otherwise disrupt the blockchain.

With CPU and GPU mining, there is a nearly unlimited amount of processing power in data centers around the world not currently used for mining cryptocurrency. With enough money, it would be comparatively simple to get ahold of the necessary GPUs for overpowering a smaller cryptocurrency than for a similar coin with ASICs available. On the Bitcoin network, even a supercomputer isn’t strong enough to out-process a handful of ASICs.

Another thing that makes ASIC enabled currencies safer from attack is the fact that the miners are useful for only one purpose. Using ASIC chips to attack a blockchain would devalue the chip used to make the attack. On the other hand, placing an attack on a GPU mined currency could debase that currency, while the hardware used to do it would retain value and functionality. This factor creates an incentive for owners of ASIC miners to act in the best interest of the currency they mine. The result is a deeper bond between the miners and the rest of the community. ASIC technology encourages miners to have more active interest in the development and success of a project.

ASIC enabled cryptocurrency is also protected against botnets. This February, over half a million computing devices were hijacked by malicious code and used to mine cryptocurrency, unbeknownst to the owners of those devices. Again, ASICs make those types of attacks impossible and keep hash power with those who have a vested interest in the currency.

New mining algorithms are making it possible to use the same ASIC for Machine Learning\AI which will lead to even more breakthroughs in that field. This is a trend that will likely continue. Any social benefit that mining technology can offer outside of the cryptocurrency space is great for the community and the world.


  • ASIC miners are more energy efficient than their GPU counterparts. They consume much less power per hash than either GPU or CPU.
  • They offer the best hash rates for any token they have been designed for, and are currently 30x faster than a GPU.
  • ASICs are compact. To achieve a comparable hash rate with a GPU installment, you would need a lot more physical space to contain the mining gear.
  • Simple to set up. All you need is a power supply to get them running. To achieve the same hash rate with GPUs an extensive amount of skill at hardware and software setup would be required.
  • Cost efficient. If you were setting up a serious GPU mining rig, it would likely be more expensive than buying an ASIC, because of the number of hardware peripherals you also must acquire for GPU.
  • Higher Profit Margin. The unmatched power and efficiency make for much higher profit potential.


An ASIC is a complete package, add a power supply, and you’re ready to go. They offer power and energy-efficient hash-rates.

If you want to be more than just a hobbyist, you need ASIC miners.

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