ASIC is an abbreviation, standing for ‘Application Specific Integrated Circuit’.
An integrated circuit is a microchip – a set of circuits which are manufactured together as a single component, on top of a small plate made from semiconductor material such as silicon. This stands in distinction to a ‘discrete circuit’ which is put together using multiple components which were manufactured separately.
An application specific integrated circuit is therefore a microchip which has been designed to perform a specific job, in distinction to the kind of general purpose microchip which you would expect to find inside most computers.
Within the context of this blog the term ‘ASIC’ most likely refers to a microchip which has been designed specifically for performing the Proof of Work calculations used for the mining of cryptocurrencies like Bitcoin.
Various different cryptocurrencies operate using different mining algorithms. Bitcoin, for example, uses the SHA-256 algorithm. A Bitcoin ASIC is therefore a microchip which has been designed solely for performing SHA-256 calculations as quickly and efficiently as possible. Cryptocurrencies with different mining algorithms would need an ASIC designed specifically for the kind of calculations performed as part of that algorithm.
ASIC Resistant Mining Algorithms
Because most people have regular computers but do not have mining ASICs, and because those ASICs can be very expensive and can be exploited for profit by manufacturers before being released to the public, the use of ASICs for mining has lead to a reduction in the numbers of peope who can profitably participate in the mining process. This ‘centralization’ of the mining process goes against the peer to peer decentralized spirit of Bitcoin and also reduces its security (because it is more likely that a single large operator could gain control over the whole network).
As a result of these factors, alternative cryptocurrency (alt coin) developers have sought to create new mining algorithms which are designed specifically to require the use of a general purpose computer rather than an ASIC. Also, because the kind of high-end graphics processors (GPUs) used in gaming computers can also be used for mining more effectively that regular processors (CPU), and because these high-end GPUs are also not widely owned or available around the world, some developers have attempted to create mining algorithms which are not only ASIC resistant, but which also do not offer any significant advantage to GPUs. The purpose of doing this is to make mining as decentralized and egalitarian as possible, and to thereby increase the number of miners and ultimately the security of the network.
Popular ASIC resistant mining algorithms include:« Back to Glossary Index