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What is an ASIC Miner?

6 months ago

When Bitcoin was first created and mined, the calculations of the supply and difficulty was based on the simple law of Moore’s Law, which in simple words states that, with time processors and graphical computing units will decrease in size but increase in efficiency. As evident, the case might be so but it hasn’t been favorable in Bitcoin’s processes. Nor the other top 5 cryptocurrencies.

To understand how ASIC miners came into play, the original plan for Bitcoin was to make the difficulty absolutely redundant--none at all, making mining possible arguably for the worst of processors to spur up mass adoption of Bitcoin. As soon as ‘nodes’ (miners) on the network saw a window of opportunity to gamify the system and increase earning by using graphical units to compute more transactions and generate blocks, the difficulty increased since.

The difficulty is placed on the network to keep the finite supply of the 21,000,000 Bitcoins regulated and to decrease the generation of new Bitcoins on every blocks, and halving the reward rate after 210,000 blocks on the network.

The 21 million supply was calculated thoroughly and evenly, averaging about to a block every ten minutes:

21000000 / (50 BTC * 24hrs * 365 days * 4 years * 2) = 5.99 blocks/hour

Since then nodes have been finding ways to increase efficiency while mining, be it farms, or renting out hashpowers from server farms or cloud miners. Pools came in to make an equal effect, if not more, to the network weight of Bitcoin.

Pools are a network of miners that distribute the hashing power of different nodes to mine transactions and blocks, and split the rewards according to the contribution made by specific nodes, be it in the nonce-finding process or the merkle root program.

The network weight, traffic, total hashpower in the system are the variables at play that operates the Bitcoin’s protocol to adjust the difficulty rate and keeping the block generation rate steady at 10 minutes.

ASIC miners or previously known as FGPAs, are all the rage now, as each ASIC packs a punch and has amazing mining hashpower packaged in the miner, ranging from the power of mH/S to tH/s. Utilizing as little electricity as possible, it has become more feasible to miners and hardware producers alike.

ASICs may have played plenty a role in further developing Bitcoin further, but it is bringing the Tragedy of the Commons much closer to the cryptocurrency. For more comprehensive guides visit the guides section on CryptoCrawl