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The excessive utilization of application-specific integrated circuits for the fundamental goal of mining has generated tons of controversies, and many people debate whether they should have a use case for mining. Visit Ethereum trader website to get a detailed analysis of bitcoin trading. People who don’t know ASICs are designed and optimized mining hardware with chipset compatible with only one hashing algorithm.
Unlike graphic processing units, you cannot use cryptocurrency mining hardware to generate every cryptocurrency you want. Undeniably ASICs are being excessively utilized for the fundamental goal of mining, but other industries have also discovered the utilization of ASICs. For example, ASICs have a robust use case in aerospace engineering and satellite production. However, ASICs are not equipped with any other use than virtual currency mining in cryptocurrencies.
ASIC has successfully eliminated its competition in the mining industry as no GPU’s profitability in bitcoin mining is nothing compared with the profits offered by standard application-specific integrated circuits. Furthermore, ASIC manufacturers claim it is nearly impossible to mine that cryptocurrency profitably with other mining hardware when developing a specific mining hardware structuring upon a hashing algorithm.
But in ASIC resistant cryptocurrency, mining is still viable and highly profitable by utilizing graphic processing units and even central processing units. ASICs have introduced the notion of centralization in this business. Let’s discuss how centralization in cryptocurrency mining can profoundly impact the mining ecosystem.
Key Takeaway!
- In cryptocurrency mining, the massive utilization of application-specific integrated circuits is a massive issue for both the environment and the mining ecosystem.
- Application-specific integrated circuits refer to a specific mining machine having the fundamental goal of outplacement GPUs in the mining business. Undeniably these machines have succeeded in doing so in the bitcoin network. Still, ASICS is being accused of generating massive electronic waste due to its high noise production level alongside heavy power consumption.
- The developer of such mining hardware claims that subsequent release of a mining machine that targets mining of a specific cryptocurrency, no mining machine can make the process profitable as of that hardware.
- In the mining industry, the number of ASIC manufacturers is not very large; Bitmain is the largest manufacturer of ASIC of all time.
- Since the ASIC industry is equipped with fewer manufacturers, a few manufacturers have acquired control over the hash rate. In short, cryptocurrency mining centralization can also lead to 51% attacks.
Bitmain!
ASIC as a mining machine is not necessarily bad as many miners are happily shifting towards this specialized mining machine. However, people usually worry about the ways subjected to the distribution and supply of these mining machines. As discussed above ASIC industry is equipped with a significantly less extent of the manufacturer, making the mining industry a bit more centralized. Bitmain and Avalon are two top-rated mining machine manufacturers.
But the prominence of Bitmain in this industry is nearly unbeatable. Rather than owning a massive supply over the mining industry in terms of ASIC machines, Bitmain is correspondingly a parent company of the few largest cryptocurrency mining pools based upon hash rate and their user base.
At first, Bitmain released ASIC machines targeting bitcoin mining, and it successfully diminished the dominance of graphic processing units in bitcoin mining. However, if the bitcoin network had acquired resistance towards application-specific integrated circuits, the utilization of graphic processing units should have been sustained in the bitcoin mining industry.
Bitmain then targeted the ethereum mining ecosystem. Even though the ethereum network claimed that it is resistant to the excessive use of application-specific targeted circuits, Bitmain kept releasing ethereum centric mining hardware.
However, this move of Bitmain did not seem to have a tremendous impact on the mining ecosystem of ethereum. Since ASIC supply and issuance is limited to only a few players in the marketplace, these companies can efficiently execute 51% attacks on any cryptocurrency network, especially Bitmain, as it owns famous mining pools.
Decentralization!
The mere way to decentralize the virtual currency mining community is to allow other companies to manufacture application-specific integrated circuits. Application-specific integrated circuits must have limited use in the mining industry, and the ASIC resistance mechanism should be applied in every cryptocurrency network.