What Is ASIC Mining: How to Start ASIC Mining

what is ASIC mining
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If you want to get started mining cryptocurrencies, you’ll need the right equipment. While many miners use GPUs to complete mining operations, using an ASIC miner can result in better results. When mining various cryptocurrencies, having an ASIC miner makes it easier to generate profits. This guide lets you know what ASIC mining is and some of the best ASIC miners available.

What is ASIC mining?

ASIC mining stands for “Application-Specific Integrated Circuit mining.” It refers to using specialized hardware known as ASICs to mine cryptocurrencies, particularly those based on proof-of-work (PoW) consensus algorithms like Bitcoin and Litecoin.

In cryptocurrency mining, a proof-of-work algorithm requires miners to solve complex mathematical problems to validate and add new transactions to the blockchain. The first miner to solve the problem gets to add the next block to the blockchain and is rewarded with newly minted cryptocurrency and transaction fees.

ASICs are specialized hardware devices explicitly designed for efficiently performing a single task, in this case, solving the PoW algorithm of a particular cryptocurrency. Unlike general-purpose computer hardware like CPUs or GPUs (graphics processing units), which can perform various tasks, ASICs are optimized for a specific algorithm, making them much more efficient at mining.

ASIC miners have a significant advantage over other types of hardware when it comes to cryptocurrency mining. Their efficiency and performance are far superior to traditional CPUs and GPUs. This advantage comes from the fact that ASICs are custom-designed to perform the specific calculations required by the PoW algorithm, which allows them to perform these calculations much faster and with significantly lower power consumption.

However, there are also some drawbacks to ASIC mining. One primary concern is the centralization of mining power. Since ASICs are expensive to develop and manufacture, only large companies or well-funded individuals can afford to create them, leading to a concentration of mining power in the hands of a few players. This could make the network less decentralized and more susceptible to control by a small group.

Overall, ASIC mining has played a crucial role in developing the cryptocurrency mining ecosystem, particularly in the early days of cryptocurrencies like Bitcoin. It has driven the industry towards increased efficiency and higher performance but has also raised concerns about centralization and accessibility.

How Does ASIC Mining Work

ASIC mining works by leveraging the specialized capabilities of Application-Specific Integrated Circuits (ASICs) to perform the specific task of cryptocurrency mining, which involves validating transactions and adding new blocks to the blockchain. Here’s how ASIC mining works:

Design and Manufacturing: Developers design ASIC chips for a cryptocurrency’s mining algorithm. The design is optimized to perform the necessary cryptographic calculations as efficiently as possible. These chips are then manufactured at scale.

Hardware Setup: Miners acquire these ASIC chips and assemble them into mining hardware, often called ASIC miners or mining rigs. To ensure proper operation, these rigs might contain multiple ASIC chips, cooling systems, power supplies, and other components.

Mining Software: Miners also install specialized mining software on their ASIC mining rigs. This software acts as an interface between the mining hardware and the cryptocurrency network. It provides the necessary instructions for the ASIC chips to perform the mining process.

Mining Process: The mining process involves solving complex mathematical puzzles or cryptographic hash functions. For example, in the case of Bitcoin, the mining process requires finding a nonce (a random value) that, when combined with the transaction data of a block, produces a hash value that meets certain criteria (has a specific number of leading zeros).

Hashing Power: ASIC miners excel at performing these hash calculations quickly and efficiently due to their specialized design. The more hashing power a miner has (the higher the number of hash calculations it can perform per second), the higher the chances of successfully mining a block and being rewarded with cryptocurrency.

Mining Pools: Due to the competitive nature of mining and the high computational power required, individual miners often join mining pools. A mining pool is a collective group of miners who combine their hashing power to increase their chances of solving cryptographic puzzles and receiving rewards. If the pool successfully mines a block, the rewards are distributed among its participants based on their contributed hashing power.

Block Validation: Once a miner or a mining pool solves a cryptographic puzzle and adds a new block to the blockchain, the block is broadcast to the network for validation. Other nodes in the network verify the validity of the block and its transactions. If the block is valid, it’s added to the blockchain, and the miner or pool that mined it receives the associated rewards, typically including newly minted cryptocurrency and transaction fees.

Continuous Mining: The mining process continues as long as miners and mining pools dedicate their ASIC mining rigs to solving cryptographic puzzles. New blocks are added to the blockchain at regular intervals, and the difficulty of the puzzles adjusts dynamically to maintain a consistent block generation rate.

In essence, ASIC mining involves designing, manufacturing, and using specialized hardware to perform the particular and computationally intensive task of mining cryptocurrencies. This specialized hardware is optimized to perform the required calculations with maximum efficiency, making ASIC miners much more powerful and energy-efficient for mining than general-purpose hardware like CPUs or GPUs.

How to Start ASIC Mining

The process of mining cryptocurrency with an ASIC miner is relatively straightforward. However, it is not as simple as plugging in the device and mining with it.

Choosing an ASIC miner

The first step in this process is to select the best ASIC miner with high energy efficiency and hashing power. Ensure you do not choose an ASIC miner out of your price range. The best ASIC miners are typically the most recent ones introduced to the market, with the most modern and advanced features.
Ensure you have enough room for the ASIC rig you’re putting together.

Many miners prefer to set up a large mining area in their garage or basement. The mining rig you build should include motherboards, a power supply, a central processing unit, and sturdy frames to hold the devices. The power supply you choose should support the power consumption that your ASIC miners use if you want to avoid complications.

Choosing Mining Software

Mining software is a computer program that connects the mining hardware, the blockchain, and mining pools. You cannot connect the hardware to the correct network or pool if you purchase the incorrect mining software. Regarding Bitcoin mining software, some of the most popular options include BitMinter (which has since been discontinued), CGMiner, and MultiMiner.

Coins can be mined

The number of cryptocurrencies that can be mined with ASICs is far smaller than those that can be mined with a GPU rig. ASIC-mined cryptocurrencies include Bitcoin, Litecoin, and several others.

Join a Trusted Mining Pool

This step entails joining the appropriate mining pool for you. While being an individual ASIC miner who performs this process on their own may appeal to you, the chances of being the first to solve the block puzzle are extremely low, so joining a pool is highly recommended. Using a mining pool, the computing power of multiple machines is combined to perform mining operations. Any profits from these operations are then divided among the members.

If you want to be sure that the mining pool you join is trustworthy, look at the pool’s size. You may need to join a larger pool to benefit from a higher hash rate. Furthermore, it determines when the pool makes payments and whether any minimum payment requirements have been set.

Power consumption

The most recent generation of ASIC machines is more energy-efficient than GPU rigs but still consumes a lot of power. Installing an ASIC miner in one’s home may necessitate upgrading the electrical wiring system to handle the increased power load.

Return on Investment

Despite the unpredictability of crypto mining, there are methods for calculating mining profitability and estimating your return on investment. When performing these calculations, the most important rates to consider are power consumption, BTC prices, energy costs, and the hash rate of your mining rig of choice. Profitability can then be calculated by day, month, or year.

Which ASIC Miner is Best?

While many dozens of ASIC miners are at your disposal, this section looks at 10 of the best ASIC miners on the market.

Antminer S19 Pro

The most profitable ASIC miner tailored for Bitcoin and the SHA-256 algorithm is the Antminer S19 Pro. Developed by Bitmain, a prominent manufacturer in the mining hardware industry, it enjoys widespread popularity among individual miners and Bitcoin mining enterprises.

This device is the pinnacle of efficiency, boasting an impressive energy consumption rate of 29.7 J/TH. It is engineered with an advanced 5nm chip alongside a second-generation chip specialized for SHA-256 mining.

In contrast to other entries in this category, the Antminer S19 Pro unequivocally emerges as the most economically viable and effective mining solution available today. Even compared to its counterpart in the S19 Series, the S19 maintains superior performance despite its slightly heavier build.

For those curious about the potential returns from this ASIC Bitcoin mining hardware, a daily profit of approximately $12 can be anticipated, assuming an electricity cost of $0.1 per kilowatt.

With such energy expenses, the device’s daily operational cost is projected at just $7.80, while its daily earnings reach $37.23. This translates to an annual profit of $10,741.95, yielding an impressive annual return rate of 195%. Notably, the device offers a relatively short 186-day payback period, making it a compelling choice for miners seeking rapid investment returns.

WhatsMiner M30S++

Boasting an exceptional power efficiency of 31 J/TH (joules per tera hash), this device stands out among the elite Bitcoin ASIC miners capable of achieving such efficiency levels. Its dimensions measure approximately 16.875″ in length, 5.75″ in width, and 8.8125″ in height. Throughout its operational usage, negligible fluctuations are observed in power efficiency, power consumption, and hash rates, as demonstrated by comprehensive testing. This device maintains a consistent performance standard while operating on the SHA-256 algorithm, which underpins Bitcoin mining and more than ten other cryptocurrencies.

Comparatively, the Whatsminer M30S+ falls short of the capabilities of this device. Produced by MicroBT in Shenzhen, the Whatsminer M30S+ arrives with a 6-month warranty, featuring a plastic construction and a 135-day payback period. It establishes communication with the computer through a LAN connection.

Bitmain Antminer S19

Bitmain’s latest addition to the Bitcoin mining landscape is the Antminer S19. Designed to focus on miners capable of handling high voltage, this system is an attractive option for cryptocurrency enthusiasts. Equipped with an automated power supply, the unit arrives primed for operation.

Boasting a hash rate of around 95 Th/s and power consumption of approximately 3,250 watts, this ASIC miner offers impressive performance and ease of setup, a task achievable within a short timeframe. The Antminer S19’s ability to generate minimal heat renders it suitable for installation in dry basements, which is particularly advantageous for those grappling with limited space. With a price range spanning from $4,300 to $5,500, this mining hardware offers an accessible yet advanced solution for mining endeavors.

WhatsMiner M32-62T-52W

Capable of mining any cryptocurrency that employs the SHA-256 algorithm, the Whatsminer M32-62T-52W offers versatility in its utility. Its straightforward setup and deployment make it compatible with various mining farms. In addition to its proficiency in Bitcoin mining, the M32-62T extends its support to 10 other coins.

Renowned for its exceptional power efficiency, this system is a premier choice among ASIC miners. It boasts the potential to yield a daily profit of approximately $10. However, it’s worth noting that acquiring one of these units will come at a substantial cost. This mining equipment commands an investment of around $6,000.

AvalonMiner 1166 Pro

Unveiled in August 2020, the AvalonMiner 1166 Pro is a versatile cryptocurrency mining solution capable of mining Bitcoin, Bitcoin Cash, Bitcoin SV, and various other SHA-256-based cryptocurrencies. This device distinguishes itself with its significantly elevated hash rate and power consumption compared to many counterparts featured in this compilation.

Being a creation of Canaan, a prominent figure in the mining hardware sector and recognized as a national high-tech enterprise in China, the AvalonMiner 1166 Pro has garnered popularity as a sought-after Bitcoin ASIC mining apparatus.

The device’s compact dimensions of 16 nm are accompanied by an efficiency rating of 0.042 j/Gh, signifying its continued viability as profitable Bitcoin ASIC mining hardware. Enhanced by the presence of four cooling fans, the device remains efficiently cooled during operation. Depending on local electricity rates, one can anticipate daily earnings of around $2.77, monthly returns of $83.10, and annual gains of $1,011.05 from this device.

DragonMint T1

Introduced to the market in 2018, the DragonMint T1 from Halong Mining stands as a significant ASIC mining apparatus tailored for the SHA-256 algorithm. Notably, this device emerged through collaboration with a Bitcoin Core developer, lending it a credible foundation. Its capabilities extend to mining Bitcoin, Bitcoin Cash, Bitcoin SV, and an additional seven cryptocurrencies that rely on this algorithm.

Highlighting its robust features are FCC, EMC, LVD, and CE certifications for power unit compliance. A sophisticated temperature control mechanism ensures the device’s optimal performance even during extended mining sessions. Operating at 240V, the device incorporates a pair of 9-blade variable revolution 1480W fans, effectively maintaining its temperature below 77 degrees Fahrenheit.

ASICminer 8 Nano

The ASICminer 8 Nano stands out for its exceptional durability, capable of sustaining cryptocurrency mining operations for a remarkable 50,000 hours. Remarkably, even if 35% of its fans are deactivated, this machine is expected to persist in its functionality. Adding to its appeal is the device’s suitability for residential settings, attributed to its remarkably low noise emission compared to its counterparts in this compilation.

Positioned as a SHA-256 algorithm-based mining apparatus, the ASICminer 8 Nano is equipped to mine all cryptocurrencies founded on the SHA-256 algorithm. This functionality is achieved while maintaining an impressive efficiency rating of 0.044 J/GH10%. Occupying dimensions of 500mm x 500mm x 235mm, the machine exhibits a manageable physical profile.

Reports from users indicate that this machine has the potential to generate daily earnings of up to $13.87 through Bitcoin mining. The profitability when mining other coins may naturally exhibit variability.

Bitmain Antminer S17

Crafted specifically for mining SHA-256 algorithms, including Bitcoin, Bitcoin Cash, and Bitcoin BSV, the Bitmain s17 proves its versatility by supporting over 40 different coins for mining. This extensive range encompasses a majority that remains financially viable. With an impressive profit ratio of 55% and an annual return rate of 126%, this device outshines several counterparts in the mining hardware spectrum.

Driven by a 7nm chip architecture housing 144 chips, the device’s thermal stability is ensured by incorporating four fans, effectively preventing overheating. Its physical dimensions stand at 178 x 296 x 298 mm, a design that reflects Bitmain’s unwavering confidence in its manufacturing prowess, as evidenced by the 288-day payback period.

Under the premise of an electricity cost of $0.1 per kilowatt, this device is anticipated to yield a substantial profit of $12.26 from Bitcoin mining. Extrapolating this over a year, annual profits amount to an impressive $4,474.90. However, it’s important to note that the Bitmain s17 exhibits elevated noise levels compared to other devices on this list, alongside a slightly lower hash rate.

Ebang Ebit E11++

Emerging as a favored Bitcoin mining unit, the Ebang Ebit E11++ secures its position among the elite ASIC miners because it integrates a cutting-edge 10nm chip. The mining board incorporates a critical fault protection kit, necessitating direct linkage to breakout boards for optimal functionality.

This mining marvel showcases its adaptability even in expansive mining operations by incorporating cluster management software systems. This enables diligent system monitoring and facilitates swift transitions between mining pools and IP addresses. The miner’s payback period is 470 days, which underscores its cost-effectiveness.

An exemplary feature distinguishes itself in the form of standalone heat sinks that effectively regulate operating temperatures, ensuring a consistently cool operational state. It is essential to highlight that some details regarding the miner’s characteristics were not provided.

Jasminer X4

Unveiled in November 2021, the Jasminer X4 exhibits its prowess in mining Ethereum and a spectrum of other Ethash-based cryptocurrencies. This model stands as a standout ASIC miner, underscored by its remarkable hardware performance of up to 2.5 Gh/s. This achievement is achieved with a mere power consumption of 1,200 watts.

For context, envision the Jasminer X4’s power equivalent to approximately 80 GTX 1660 Super GPUs while drawing a mere fraction—five times less—of their power intake. This ASIC miner balances performance and auditory comfort by operating at an acceptable noise level of 75 decibels.

Considering the potential returns, investing in the X4 holds lucrative promise. However, it’s worth noting that the initial outlay is substantial, hovering around $54,000.

ASIC Mining vs GPU

It is often asked; Is ASIC mining better than GPU mining? If you want to mine cryptocurrencies, you can choose ASIC crypto mining or GPU crypto mining. Before the introduction of ASIC miners to the market, most miners used the graphics processing units readily found in every computer to solve complex equations rapidly. Here’s a comparison of the two:

ASIC (Application-Specific Integrated Circuit) mining and GPU (Graphics Processing Unit) mining are two different approaches to cryptocurrency mining, each with its own advantages and disadvantages. Let’s explore both in more detail:

ASIC Mining

  1. Specialization: ASICs are custom-designed hardware specifically optimized for mining a particular cryptocurrency algorithm, such as Bitcoin’s SHA-256 or Litecoin’s Scrypt. This specialization allows ASICs to perform mining tasks with significantly higher efficiency and speed compared to general-purpose hardware like GPUs.
  2. Efficiency: ASICs are highly efficient in terms of power consumption and hash rate. They can provide a much higher hash rate per unit of power consumed compared to GPUs, making them more cost-effective in the long run for the specific algorithm they are designed for.
  3. Competition and Centralization: As ASICs are highly efficient and focused on a single algorithm, they can lead to increased competition among miners. However, this can also lead to centralization, as those with access to the most advanced and efficient ASICs have a competitive advantage, potentially leading to fewer individuals or entities controlling the network.
  4. Limited Use: ASICs are purpose-built for specific algorithms. If the cryptocurrency network’s algorithm changes or a new coin is introduced with a different algorithm, the existing ASICs become obsolete and new ones need to be developed.
  5. Initial Investment: Acquiring ASIC hardware can be expensive upfront, and the ROI (Return on Investment) depends on factors like the cryptocurrency’s price, mining difficulty, and electricity costs.

GPU Mining

  1. Flexibility: GPUs are general-purpose processors designed for tasks like rendering graphics. They can also be used for mining various cryptocurrencies by adapting to different algorithms through software. This makes GPUs more versatile than ASICs, allowing miners to switch between different coins or algorithms.
  2. Decentralization: GPU mining is generally more decentralized than ASIC mining. Since GPUs are widely available and can mine multiple coins, individual miners have a better chance to participate and compete in the network, reducing the risk of centralization.
  3. Adaptability: GPUs can be repurposed for other tasks, such as gaming or rendering if mining becomes less profitable or the algorithm changes. This provides more flexibility in terms of usage compared to ASICs, which are usually only useful for mining.
  4. Power Consumption: While GPUs are less power-efficient compared to ASICs for specific algorithms, they offer better power efficiency across a broader range of tasks. This can be beneficial in areas with high electricity costs.
  5. Lower Entry Barrier: Getting started with GPU mining can be more affordable than investing in ASICs, especially if you already have a gaming computer with capable GPUs.

In order to verify electronic transactions, GPUs effectively decode cryptographic codes. While GPUs can be used for a variety of tasks, ASIC miners are specifically designed for cryptocurrency mining. Because ASIC miners are focused on mining, they are typically faster and use significantly less energy than graphics processing units. In terms of cost, a GPU is less expensive than an ASIC miner.

ASIC Mining Profitability

Mining is profitable with an ASIC, as their sole purpose and design are based on mining cryptocurrency given their top-range efficiency. Is ASIC mining profitable? Well, the best ASIC miners can increase your chances of profitability, which is why ASIC mining may be a great option if you can afford it.

The profitability of ASIC mining depends on several factors, and it can vary significantly depending on the cryptocurrency you’re mining, the current market conditions, the cost of electricity in your location, and the efficiency of your ASIC hardware. Here are some key factors to consider when evaluating the profitability of ASIC mining:

  1. Cryptocurrency Selection: Different cryptocurrencies have varying levels of mining profitability. Bitcoin, for example, has a highly competitive mining environment due to the dominance of powerful ASIC miners. Smaller or newer cryptocurrencies may offer higher profitability but come with higher risks.
  2. Hash Rate and Mining Difficulty: The higher the hash rate of your ASIC miner, the more likely you are to solve blocks and earn rewards. However, as more miners join the network, the mining difficulty increases, potentially reducing your share of rewards.
  3. Electricity Costs: The cost of electricity is a significant factor in mining profitability. If your electricity costs are high, it can eat into your profits. Miners often seek regions with low electricity costs or alternative energy sources to improve profitability.
  4. ASIC Efficiency: The efficiency of your ASIC hardware is crucial. More efficient miners consume less electricity while delivering higher hash rates. Look at the miner’s power consumption in watts (W) and its hash rate in hashes per second (H/s) to calculate its efficiency.
  5. Initial Investment: ASIC miners can be expensive. Your profitability is also influenced by the initial investment you make in purchasing the hardware. Consider how long it will take to recoup your investment and start generating a profit.
  6. Maintenance Costs: ASIC miners require maintenance, including cooling, repairs, and regular cleaning. These costs can affect your overall profitability.
  7. Market Price of Cryptocurrency: The price of the cryptocurrency you’re mining has a direct impact on your profitability. If the price increases, your earnings in that cryptocurrency will be worth more.
  8. Mining Pool vs. Solo Mining: Joining a mining pool can provide more consistent earnings compared to solo mining. While the rewards are shared among pool members, you are more likely to receive regular payouts.
  9. Tax Implications: Be aware of the tax implications of cryptocurrency mining in your jurisdiction. Profits from mining may be subject to capital gains tax.

To calculate the potential profitability of ASIC mining, you can use online mining calculators that take into account factors like electricity costs, hardware efficiency, and current network difficulty. These calculators can provide estimates of your daily, weekly, and monthly earnings.

Keep in mind that the cryptocurrency market is highly volatile, and profitability can change rapidly. It’s essential to stay informed about market trends and regularly assess your mining setup’s performance and costs to determine whether it remains profitable or if adjustments are needed. Additionally, consider the long-term sustainability and environmental impact of your mining activities.

Bottom line

Whether you’re new to mining or have been doing so for years, using an ASIC miner can help you save energy while increasing your profit potential. While these devices are more expensive than GPUs, they are also capable of providing a higher return. If you want to get started with ASIC crypto mining, the ASIC miners on this list will more than suffice.

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