The Basics of ASICs

What exactly are ASICs, and what do they do? Coin Pursuit takes a look at how these little chips have made a big difference in the mining process.

Application-specific integrated circuits (ASICs) are customized pieces of computer hardware that are designed solely to perform one specific function. For example, the telephone circuitry in your smartphone is often stored on a separate chip dedicated to making and receiving calls—in other words, an ASIC. There are also ASICs out there for gaming, sound and video capability for both stationary and mobile computing devices. We're gonna take a look at how ASICs are applied to the cryptocurrency industry—specifically, for the process of mining data blocks.
For the most part—especially with the more complex SHA-256 mining algorithm—regular computers were not designed with digital currency mining in mind. As the difficulty of hash increases—that is, the complexity of the calculations necessary for successful mining—miners who use standard-issue computer equipment may find the process more difficult to perform; it can draw a lot of energy, and can take resources away from other programs, making all the tasks being performed by the computer frustratingly slow. This is where mining ASICs come to the rescue. They're made for mining, and only mining, and their special design allows them to take on the task in an energy-efficient manner. ASICs perform separately from other computer components, so they don't have to “share” tasks with other hardware. Therefore, the use of ASICs in digital currency mining makes the process cheaper, faster, and potentially more profitable. A quick caveat here: the process can be cheaper once the ASIC is up and running, but some of the more powerful mining ASIC systems can be somewhat expensive to purchase in the first place.
In the cryptocurrency mining industry, there's a little bit of semantic confusion when the term “ASIC” is used. Strictly speaking, the term applies to the circuit—or the chip—that's been created to carry out a predetermined function. However, some miners will often set aside an entire computing system—equipped with one or more ASICs—to undertake the mining process for them. Often, those miners will refer to the entire dedicated system generically as an ASIC or an “ASIC box,” even though the term should technically be applied only to the specialized hardware within.

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