Bitcoin is collected through ASIC miners. Here’s what it is and why it matters
It’s not a desktop PC or a dedicated graphics card mining rig — it’s something else. Application specific integrated circuits, or ASICs, are chips that are designed with a singular purpose, ranging from audio processing to managing a cellphone call. In the case of cryptocurrency mining though, these chips are built into specifically-designed motherboards and power supplies, constructed into a single unit. It’s not just a purpose built machine though, it’s purposely designed and developed hardware right down to the chip level.
WHAT AN ASIC MINER ACTUALLY DOES
In a nutshell, mining is the process of running complicated calculations in the search for a specific number. Mining hardware, whether it’s an ASIC miner or a GPU mining rig, has to run through many calculations before finding that number. In proof of work systems like Bitcoin, the first one to find that number gets a reward — at the time of writing, 12.5 Bitcoins. That’s worth around $110,00.
There are so many people and powerful computing systems trying to mine Bitcoin though, that almost everyone bands together with a group of miners to try and find that number. That said, miners tend to earn more if they have faster hardware. That’s why people who can afford it opt for ASIC miners because it gives them the greatest chance of earning cryptocurrency in exchange for their investment.
Each cryptocurrency has its own cryptographic hash algorithm and ASIC miners are designed to mine using that specific algorithm. Bitcoin ASIC miners are actually designed to calculate the SHA-256 hash algorithm. In the case of Litecoin, Scrypt. That means technically they could mine any other coin that’s based on the same algorithm, though typically people who buy ASIC hardware designed with one particular coin in mind, mine that coin.