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Application-Specific Integrated Circuit (ASIC) Definition, Investopedia

Application-Specific Integrated Circuit (ASIC) Definition, Investopedia

DEFINITION of ‘Application-Specific Integrated Circuit (ASIC)’

An application-specific integrated circuit (ASIC) is a chunk of pc hardware that is designed for one particular use, such spil running the hash algorithms used ter bitcoin or litecoin mining.

Australian Securities And Investments .

Difficulty (Cryptocurrencies)

Litecoin Mining

Mining Pool

More on ‘Application-Specific Integrated Circuit (ASIC)’

ASICs have bot designed to carry out a large array of applications. Smartphones include ASICs designed to make and receive calls, for example. The term wasgoed not commonly found outside of niche technology circles, however, until the advent of bitcoin and other cryptocurrencies, when ASICs were built to carry out the calculations involved ter mining.

ASICs ter Cryptocurrency Mining

The very first cryptocurrency, bitcoin, wasgoed originally mined using a pc’s central processing unit (CPU). The bitcoin whitepaper assumes that mining would be carried out using CPUs, referring to proof of work spil “essentially one-CPU-one-vote.” (See also, How Does Bitcoin Mining Work?)

This age of techonological naivete did not last long. By late 2010, less than two years into bitcoin’s history, graphical processing units (GPUs) had displaced CPU miners. GPUs, also known spil graphics cards, are used to render photos and are popular with gamers, meaning that many would-be bitcoin miners already had them, and they were lightly obtained by those who didn’t. GPUs are capable of processing the hash functions used ter bitcoin mining much quicker than CPUs.

Mining is a competitive process, te which each knot repeats the hash function spil quickly spil possible te order to maximize their probability of finding a valid hash (one below the target). The difficulty of finding that hash is automatically adjusted by the network, depending on the total amount of hash power. The entry of GPU miners therefore made it all but unlikely for a CPU everzwijn to be the very first to find a fresh block and earn the block prize.

The process repeated itself with field-programmable gate arrays and then, ter 2013, ASICs. Butterfly Labs wasgoed the very first to announce a line of bitcoin mining ASICs, followed by the Chinese company ASICMINER. Profitably mining bitcoin with GPUs quickly became unlikely. Other bitcoin ASIC manufacturers spil of February 2018 include AntMiner, Avalon, Spondoolies and RockMiner. Samsung announced ter late January 2018 that it would start producing ASICs for mining cryptocurrency, but did not provide details.

Bitcoin mining ASICs can only be used to mine bitcoin and other cryptocurrencies using the same SHA256 hash algorithm. Litecoin, which uses Scrypt, followed bitcoin’s trajectory from CPU to GPU: litecoin’s founder Charlie Lee attributes the cryptocurrency’s success te part to bitcoin’s switch to ASICs, which created request among GPU miners for a fresh coin to mine. Eventually an ASIC wasgoed designed to mine Scrypt, and at the time of writing GPU bitcoin mining is no longer profitable. (See also, Bitcoin vs. Litecoin: What’s the Difference?)

Anti-ASIC Backlash

Bitcoin’s core appeal is its capability to decentralize financial transactions, removing intermediaries such spil banks and substituting them with a network of miners, who achieve distributed overeenstemming about the state of the blockchain. The inability to mine profitably using cheap hardware has led to a trend towards re-centralization, however: a few enormous operations employing thousands of ASICs control an outsized share of the network’s hash power.

A number of cryptocurrencies have used different hash algorithms ter order to fend off ASICs. Litecoin wasgoed often touted spil an ASIC-resistant alternative to bitcoin te its early days, but that did not last. Today there are a number of altcoins that cannot be mined using ASICs, but it’s not always clear whether their algorithms are ter fact ASIC-proof, or potential manufacturers simply don’t see an chance to profit from producing an ASIC. Zcash, which uses the Equihash algorithm, is one example.

Some developers have committed themselves to switching their coin’s hash function if ASICs are built to mine them. Vertcoin, which bills itself spil “the people’s coin,” uses a memory-intensive algorithm called Lyra2RE and promise to fork the chain to increase the memory requirements if an ASIC is developed.

Related movie: Very first 2018 Bitcoin Difficulty Increase! How bad is it?

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