Should I get an ASIC miner
What is ASIC mining?
Bitcoin doesn't appear out of nowhere. Cryptocurrency may be a digital entity made up of zeros and ones, but there is actually a lot of hardware work going on behind the scenes when it comes to producing it.
To get a single bitcoin, you need to mine it using special hardware called an ASIC miner.
ASIC mining and blockchain
Before you start mining ASIC, you must first understand blockchain technology. In very simple terms, blockchain is a technology that generates a hash that is not repeatable or replaceable.
These hashes are then cryptographically linked and "stacked" (hence "block") on top of each other to ensure nothing is repeated, creating a chain (hence "chain") of codes that ensure uniqueness and security. Our article on how blockchain technology works will explain the whole process in more detail.
All cryptocurrencies, including NFTs and Bitcoins, are based on blockchain technology. So "mining" for cryptos refers to the creation of blocks and blocks of code. So creating blockchains means looking for cryptos. You will need an ASIC miner for this.
Where and when did ASIC mining come about?
ASIC stands for "Application-Specific Integrated Circuit Miner". It is basically a very powerful, high-performance hardware designed for cryptocurrency.
The practice of ASIC mining began in 2013 when Chinese hardware company Canaan Creative made the first ASIC miner of its kind.
Extracting Bitcoin requires a lot of computing power so that conventional CPUs and GPUs could no longer do this competitively. Therefore, a new type of hardware is required that can meet the requirements of crypto mining.
Soon after Canaan Creative, companies like Bitman, Bitwats, and MicroBT started making ASIC miners.
An ASIC miner usually consists of a few key components: an ASIC chip that does calculations for codes, a fan, and a backup generator to protect against power outages during the mining process.
Technically, anyone can be involved in ASIC mining. If you are a person looking to mine money in the comfort of their own home, you need to buy an ASIC miner.
However, this device is not cheap. ASIC miners can range from $ 200 to over $ 15,000. This is why miners work together in "mining pools," where a group of miners work together to search for cryptocurrency and pool the resources of their ASIC miners.
The profits from the activity are then shared among the group, usually divided by work and energy.
Advantages and disadvantages of ASIC mining
The most obvious benefit to ASIC miners is the efficiency of the machine.
ASIC miners solve the math puzzles required for Bitcoin mining in ten minutes or less (the average time between blocks on the Bitcoin blockchain) much faster compared to a CPU.
When a puzzle is solved, the programmer behind the screen receives a block reward, which is currently 6.25 BTC. Hence, this high efficiency translates into better money making.
However, the high computing power of ASIC miners also means environmental degradation due to the colossal energy consumption. Official estimates vary, but the Bitcoin mining network consumes over 120 terawatt hours of energy per year, consuming around 0.6 percent of the world's energy supply, or the equivalent of all of Argentina or Norway's energy consumption.
Some people turn to the smaller, less power hungry Raspberry Pi to then search for cryptocurrencies.
Related: Can You Use A Raspberry Pi To Mine Cryptocurrency?
With electricity costs so high, is it really worth mining for cryptos?
It all depends on the type of crypto you are mining for. If it's a popular cryptocurrency like Bitcoin or Ethereum, you might get bigger rewards, but it's harder to get your hands on the rewards in the first place.
If it is niche crypto, it may take longer to make a profit. The energy consumption caused by ASIC dismantling varies by location, but the impact on the environment cannot be ignored.
The largest ASIC mining companies
The largest publicly traded cryptocurrency mining companies are based in the US and Europe. These include Riot Blockchain, Hive Blockchain and Northern Data AG. The former two are listed on the Nasdaq stock exchange, while Northern Data AG is listed on the German stock exchange Xetra.
In addition to these companies, several locations around the world are referred to as "Bitcoin farms".
These are places where huge warehouses are built and large numbers of ASIC miners are drawn in to mine Bitcoin and other cryptocurrencies around the clock.
The largest bitcoin farms include Reykjavik, Amsterdam, Texas, Moscow, and Liaoning Province in northeast China (although many bitcoin mining operations in northern China are moving due to environmental regulations introduced in 2021).
Is ASIC mining worth it?
Thanks to soaring cryptocurrency investments, ASIC mining is a booming industry, and it seems the fever is not going away anytime soon. If you are thinking of investing in an ASIC miner or starting a mining group with your friends, do a lot of research beforehand. After all, like many other investments, crypto is still a volatile market.
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