What is ASIC?
ASIC miners are specialized computers built to mine cryptocurrency efficiently. ASIC miners utilize ASICs to mine cryptocurrencies more efficiently than those who rely on general-purpose computers—potentially opening up the crypto mining market to the enormous computational power of ASIC.
Crypto mining software is a particular type of software created by corporations. Because it is not ASIC-resistant, cryptocurrencies like Bitcoin may be mined using these items.
But, ASIC mining equipment are not without their drawbacks. To begin with, it’s important to note that these items are in beyond the typical miner’s price range. Second, the ROI is highly unpredictable because outdated ASIC designs can become unprofitable due to shifts in cryptographic methods. Many believe that the only people who benefit from ASIC machines are the Chinese businesses making and selling them.
You can read more about ASIC Mining Rigs here.
- What is ASIC?
- What are ASIC Resistant Cryptocurrencies?
- Which Cryptocurrencies Are ASIC-Resistant?
- 2. Monero (XMR)
- 3. Ravencoin (RVN)
- 4. Ethereum Classic (ETC)
- 5. Vertcoin (VTC)
- ASIC-Resistant Mining – Threat of Monopolies?
- Benefits of ASIC Resistant Cryptocurrencies
- 1. Cut down on the preliminary expenditure
- 2. Helpful for Mining Done at Home
- 3. The advantage to Blockchain
- 4. Security Measures for the Network
- 5. Helps to Reduce Electricity Use:
- 6. More Thoughts
- Preventive Mechanism of ASIC Resistance Coins
What are ASIC Resistant Cryptocurrencies?
Coins with ASIC-resistant algorithms are what the name says they are: cryptocurrencies resistant to being mined by ASICs aka ASIC Resistant Cryptocurrencies
Its infrastructure is designed in such a way that prevents customers from mining cryptocurrency using ASIC hardware. As a result, mining these coins using ASICs is extremely difficult. It is still possible to attempt to mine these coins with an ASIC. But doing so will not result in any meaningful rewards.
Although some networks build currencies that are resistant to ASIC mining to maintain. They even expand the level of decentralization of their blockchains, others do it to lower the cost of mining and make it accessible to more people.
Which Cryptocurrencies Are ASIC-Resistant?
Though there are several cryptocurrencies that are ASIC Resistant cryptos, however, here is a list of few of the most popular ones.
1. Ethereum (ETH)
Ethereum is one of the most well-known examples of a blockchain resistant to ASIC mining. The Ethereum network rejects hashes generated by ASIC computers because it uses the Keccak-256 hashing algorithm. This is one of the reasons why Ethereum is resistant to ASIC mining.
The method is constructed so that it generates hashes exclusively for mining and does not serve any other computational function. The Proof-of-Work (PoW) hashing method used by Ethereum prioritizes GPU units because of their accessibility and lower cost. This contrasts with Bitcoin, which mainly depends on ASICs for mining new blocks.
Note: Ethereum has shifted to Proof of Stake mechanism (Ethereum 2.0) and doesn’t work on PoW anymore.
2. Monero (XMR)
Monero (XMR) is another ASIC resistant cryptocurrency that was developed. As a result, producing a new Monero does not call for any specialized hardware.
To generate new blocks, the privacy-focused cryptocurrency uses the RandomX hash function with the CryptoNote protocol. CPUs and GPUs may be used to mine Monero currencies.
In contrast to the mining farms full of ASICs used to mine Bitcoin. In addition, the fact that Monero is resistant to ASICs indicates that the network’s hash rate has significantly increased.
3. Ravencoin (RVN)
Ravencoin is a fork of Bitcoin that used an X16R hashing algorithm in the past. It employed this algorithm. But, engineers decided to move to the new KAWPOW mining method later, which required them to split the network.
By the use of this method, miners can make help with the memory and computing power of GPUs. This upgrade rendered Ravencoin immune to ASIC mining and contributed to the cryptocurrency’s increased decentralization. By allowing anybody to mine new coins using graphics processing units (GPUs).
4. Ethereum Classic (ETC)
Ethereum Classic, sometimes known simply as Ethereum Classic, is a hard fork of the Ethereum network created to preserve the unaltered state of the first Ethereum blockchain. These are non-ASIC currencies that once mined with a modified version of Ethereum’s algorithm known as EtcHash.
Nevertheless, in the most recent Thanos upgrade, the Ethereum Classic team, like Ethereum’s team, upgraded the network using the Kecaak-256 algorithm. This allowed miners to mine Ethereum Classic using graphics processing units (GPUs) with as little as 3 gigabytes of memory.
5. Vertcoin (VTC)
Vertcoin is a Bitcoin fork built as a GPU-mined version of Bitcoin to bring additional security and decentralization to the network. The Vertcoin Core Development Team created Vertcoin.
This currency utilizes an ASIC-resistant algorithm known as lyrar2v3, possibly the most ASIC-resistant coin currently available. The reason for this is that the cryptocurrency developers have opted to implement a hard fork of the network.
ASIC-Resistant Mining – Threat of Monopolies?
The 51% attack on the Ethereum Classic network demonstrated that computational power may still be monopolized, although networks have traditionally been regarded as deceased technologies.
By utilizing an ASIC boost, an eclipse attack, or any other approach that ultimately results in a 51% assault, a big mining pool can apply questionable ways to increase their block rate.
This is precisely what happened with the Verge (XVG) network in this instance. A mining tyrant who controlled 10% of the network’s total processing power could launch an attack on the Blockchain with a probability of 51% success.
But, smaller-cap currencies continue to face the risk of being monopolized, even though a comparable attack on a network as broad as Bitcoin is virtually unfeasible. As a result, some blockchain networks have embraced the idea of ASIC-resistant protocols to mitigate the effects of difficulties brought on by monopolies.
The advocates also claim that the ASIC-resistant algorithms encourage greater community engagement by decreasing the barrier to entry and establishing a blockchain environment that is more secure, distributed, and equitable while still being accessible.
Benefits of ASIC Resistant Cryptocurrencies
There are a lot of benefits of ASIC Resistant Cryptos, here is a list to demonstrate that:
1. Cut down on the preliminary expenditure
Coins resistant to ASIC mining decrease the cost of entry into the mining process. An Antminer, one of the most well-known ASICs for Bitcoin mining, can be purchased for around $6,000. Some of the most expensive ones might go up to $11,600. A good graphics processing unit, on the other hand, will run you several hundred dollars.
2. Helpful for Mining Done at Home
Coins resistant to ASIC mining allow miners to mine cryptocurrencies using their personal computers rather than investing thousands of dollars in specialized ASIC mining hardware.
3. The advantage to Blockchain
In addition to mining, using ASIC-resistant algorithms is beneficial to the Blockchain. To begin, they contribute decentralization to the network by allowing members of community participate in the mining process.
This ensures that miners are dispersed worldwide instead of being concentrated in a particular region or nation. This might prove handy if local laws suddenly restrict mining, as China did in 2021.
4. Security Measures for the Network
ASIC-resistant algorithms also protect the network from 51 per cent attacks, which occur when a single enormous organization takes control of a sizeable portion of the processing capacity of the network.
5. Helps to Reduce Electricity Use:
Using ASIC mining equipment results in the daily waste of millions of kilowatt hours of electricity. It compels developers to make changes to the Blockchain that are ecologically and technologically unfavourable.
On the other hand, this is debatable because, in the absence of ASIC resistance, ASIC mining is significantly more effective than using CPUs and GPUs, which have a lower computational power output per kWh.
6. More Thoughts
As long as there is an incentive for mining to obtain rewards, individuals and businesses will keep developing technology that offers them an edge over their competitors. The cryptocurrency market is rapidly evolving, and some industry experts believe that using ASICs to mine cryptocurrency is entirely safe because it is just a passing trend in this sector.
Even though there is some debate on the impact of ASICs, the nearly universal consensus is that these devices threaten both the egalitarian distribution of hash rates and the decentralized nature of cryptocurrencies.
Home miners and GPU miners will be excluded from the competition if ASICs are allowed to continue competing. If there is no incentive for the typical miner, then the objective of having decentralized control will never be restored.
Preventive Mechanism of ASIC Resistance Coins
Coins resistant to ASIC mining include protocols and algorithms that make it difficult for mining hardware to reach its full potential.
Much real estate on the chip is needed for the parallel and pipeline threads that provide the ASIC machine’s processing capability. Without that room, the ASIC can’t speed up the process. Therefore efficiency is sacrificed. When mining a currency resistant to ASICs, the performance of an ASIC might be poorer than that of a CPU.
An ASIC machine may be designed to mine any cryptocurrency, regardless of the algorithm it uses. The same holds for preventing ASIC mining hardware from doing its thing; tweaking the algorithm in question. Nonetheless, a currency is considered ASIC-resistant if no specialized mining computers are designed to mine that coin or if those devices are inefficient.
Mining cryptocurrencies not supporting ASICs may be done using graphics processing units (GPUs) and central processing units (CPUs). This allows anybody to participate in the network without investing in expensive equipment.
A blockchain-based network will not only become more decentralized as a result, but mining will also become less expensive.
Proof-of-stake (PoS) and proof-of-authority (PoA) are two examples of ASIC-resistant consensus algorithms, and the cryptocurrency industry has already started moving in that direction (PoA).