Cryptocurrency mining used to be something simple and easy, but those days are long gone. Currently, whether you’re mining Bitcoin, Litecoin, DASH, or a host of other cryptocurrencies, the most effective way to do so is with dedicated hardware which are known as an ASIC miner. And even then, it’s only really for professionals with masses of capital to invest upfront.
What is an ASIC miner? Short for Application-specific integrated circuit, the underlying ASIC chip is normally designed with a singular purpose, such as 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 running complex calculations in the search for a specific number. Whether it’s an ASIC miner or a GPU mining rig, mining hardware must run through many mathematical calculations before finding that number. In proof of work systems such as Bitcoin, the first one to find that number gets a reward — at the time of writing, 12.5 BTCs worth around $96,850. That reward will fall to 6.25 Bitcoins in May 2020.
There are so many people and powerful computing systems that try to mine Bitcoin that miner groups form to find that number and share the profit. Even more, the faster your hardware, the more you acquire. That’s why people who can afford it opt for ASIC miners because it gives them the greatest opportunity of earning cryptocurrency in exchange for their investment.
Each cryptocurrency has its own cryptographic hash algorithm, and ASIC miners are built to mine using that specific algorithm. Bitcoin ASIC miners are designed to calculate the SHA-256 hash algorithm. In the case of Litecoin, it uses Scrypt. That means technically they could mine any other cryptocurrency that’s based on the same algorithm, though typically, people who buy ASIC hardware designed for Bitcoin mine that specific cryptocurrency.
What makes an ASIC miner better?
When it comes to mining cryptos, 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 as mining cryptocurrency can be extremely expensive. Hardware can be costly to buy upfront, and some of it can cost thousands of dollars a year in electricity to run.
When picking 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 designed to perform more than just one task. Instead, ASIC miners are built from the ground up to perform the calculations needed 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 action. This combination of performance and low-power usage makes them much more economical to run than more general-purpose hardware.
In Bitcoin and Litecoin, ASIC mining is just about the only way anyone mines those cryptos. You can now get Ethereum ASIC miners as well, 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 best performing ASIC miners on the market. The S19 Pro can deliver 110 trillion hashes per second at a power consumption of 3,250W. The $2,400 price tag of this miner might make it too expensive for new beginners, though.
The base model of the S19 runs $1,785. It still delivers a commendable 95 trillion hashes per second, but at a much lower cost. Another option is the AntminerT17+, which processes 58 trillion hashes per second and only costs a little over $800.
In contrast, just one GTX 1070 card — which you can get for around $430 — can only reach a hash rate of about 30 million per second. When you do the math, those eight cards will cost $3,440, but only hash 240 million times per second.
Don’t forget you have to have a chassis, memory, motherboard, and power supply to install all those cards in. Then you need to power it, with each of those GTX1070 cards pulling more than 150 watts. That leads to a higher monthly energy cost.
This is one area where the do-it-yourself option just makes no sense. Going with a dedicated setup and hardware like ASIC miners cost less and deliver vastly superior performance.