Bitcoin Forum

Recently, I have been researching the various types of hashing equations used by the many different altcoins available on the market currently. Throughout my research, I would find mixed feelings amongst the authors of particular articles and from members of different mining communities regarding the apparent contempt for ASICs miners. In general, the criticism of ASICs processors with regard to a given currency would come about after a long period of incompatibility with the the devices. Once ASICs compatibility is achieved, people will often say the currency has been ASIC'd... why is this a bad thing?

I was hoping someone could shed some light as to why the OG members of a given mining community might be turned off by the advent of ASICs compatibility. Is it simply because there will be greater competition amongst miners? Does it have something to do with the fact that the difficulty will be increased at a new, exponential rate due to the computing power of the ASICs?

Thanks a bunch!

JG

Because when an asic comes on board it renders gpu's useless.  OG miners are used to cpu and gpu mining and when it gets taken away, it's gone forever.  And the mining cartels usually get first crack at equipment and things become more centralized which is the opposite of what crypto is based on.

ASICs are specialized equipment that is made to do one task. This means if you have an ASIC it will likely outhash GPUs with better efficiency and make them obsolete. It also promotes centralization  which, as wheelz just mentioned, is against the original purpose of crypto. The most clear example of this is Bitcoin. In the past anyone could mine it (while this didn't guarantee profit), but when ASICs started to pop up we got less home miners and more large ass farms filled with miners which is more or less what's happening today. Now you can't even compete with ASICs in Bitcoin or Scrypt.

Asic sellers are not "real" companies.

No one would freak too much if intel amd and nvidia built and sold asics.

they don't

and every asic company sucks compared to the three companies above.

1) asic companies vanish and steal your money.
2) asic companies mine against you
3) asic companies give short warranties
4) asic companies service your gear poorly slowly etc.


Yeah I know they are real.

But intel service for a dead cpu  approaches that of a god.

No asic company  will service your gear if it breaks like intel will.

I could go on  as to why asics are bad  but the list is long.

on the other hand  I have made profits with them  so  they are not fully bad.  Just mostly.

Agreed, ASIC's not bad but the current companies are. Lets hope Intel & Nvidia jump in and clean the mess of these retarxs

I will use an example here. When Litecoin GPU mining was a thing, a large number of people went and invested huge amounts of money into building GPU rigs just to mine Litecoin, an investment which would have a full return in a few months.

After ASICs were introduced, it rendered GPU mining useless, requiring specific equipment to be competitive in the mining business.

Correct

ASIC's create centralization, they have already caused it for bitcoin. Look at the big pools for example.

and...

centralization = antithesis of cryptocurrencies

The entire conceptualization of bitcoin didn't even account for GPUs originally, much less ASICs. 

ASICs is bad because it put all GPUs mining rig outdated, loss in profit, low ROI,... Put it simply in competitive perspective, GPU miners don't like it.

lets see whats next in the world of bitcoin mining, will ASIC remain king or someone new technology can ever takeover?

If ASIC's were manufactured in the states or somewhere where the customer support was less sketchy, it wouldn't be as bad.
If there was more competition, the quality would improve as well.

I cant wait for another country to show the Chinese how to run an ASIC business properly.

Buying from them is effing painful and so disorganised with zero planning and thought to customer service.

Cant wait for a 7nm chip to hit the market next year hopefully the Japanese will be on board by then.

Lets hope they wipe off Chinese ibelink etc.

There are a lot of reasons.

ASICs turn mining into a compulsorily commercial endeavor rather than a potentially casual endeavor. For instance, take Siacoin. A lot of people are mining it during their free time on their gaming computers or perhaps even a 6-GPU mining rig that they keep in their basement. Once the ASICs come out, the only thing that can mine them are $2,500 computers that can do nothing else. Miners who bought ASICs are going to sell everything they mine, whereas a lot of gamers and casual miners hold for speculation and simply for fun.

ASICs change the risk profile for mining. With GPU mining, someone can start mining without taking on excessive risks. If the coin crashes, they can sell their GPUs to gamers or mine something else. On the other hand, the profitability of an ASIC is intimately tied to the price of a coin. Buying an ASIC is therefore much more speculative than buying a GPU, and highly speculative investments are less attractive than less speculative alternatives.

ASICs are industrial units rather than retail units like GPUs. They do not belong in homes and are thus off limits to the vast majority of people. This contravenes the goal of decentralization that most crypocurrencies endorse.

Another reason is that reputable companies like Nivida, Intel, AMD, IBM, ASUS, and Gigabyte are not developing ASICs. Instead, we have sketchy companies like Bitmain, Ibelink, and Baikal.

Finally, most altcoins are developed with the goal of ASIC resistance. As soon as an ASIC comes out, it implies that the developers were incompetent in achieving their stated goals. It also makes the coin uninteresting because an advantage it had over bitcoin (ASIC resistance) is gone.

So, yes, ASICs are bad in most cases. It's very hard for me to see a future for ASIC coins (other than Bitcoin, of course).

But for a coin to go mainstream........it will have ASICs no? Whenever there is money to be made, you know someone is going to go after that money.


i'm just playing devil's advocate here

in terms of earnings, the bad side of ASIC mining is putting the GPU miners stay out of the game, and the other bad side of ASIC miners are the after sales market support real Chinese products are very poor in customer service. Aside from profit, the other good thing from ASIC mining is the less power consumption with the same hash rate benchmark compared the GPU, less space and less heat generated. Semi-centralized ASIC mining defeats the purpose from BITCOIN protocol.

Ethereum, Monero, and Zcash are mainstream cryptos that don't have ASICs.

These cryptocurrencies use algorithms that are designed to be ASIC resistant, but it's plausible to me that ASICs or FPGAs could be developed. However, these cryptocurrenices employ another layer of ASIC resistance: the promise of switching algorithms if ASICs are developed (or moving to proof of stake in the case of Etheruem).

This second layer of ASIC resistance is actually more important than the inherent resistance of the algorithm. I believe that it is sufficient to ward off ASIC development. The developers behind Litecoin and Dash did not implement this strategy, which is why both coins are failed projects in my book.