What is an ASIC Miner?
Application specific integrated circuit (ASIC) miners are a piece of hardware in the form of a chip designed for a very distinct operational purpose, to quickly and cost-efficiently mine a variety of cryptocurrencies, by solving mathematically complex Proof of Work problems that also have easily verifiable solutions.
History of ASIC Mining
ASIC miners were developed in 2013, and replaced Central Processing Unit (CPU), Graphical Processing Unit (GPU), and field programmable gate array (FPGA) based mining as a faster way to mine cryptocurrency.
When cryptocurrency first came on the scene less than a decade ago, it was profitable for individual miners (in the form of personal computers) to run these complex calculations, announce the solution to the mathematical problem to the network, and earn a mining fee for each successful calculation. This CPU-based mining was what cryptocurrency was built upon.
However, mining cryptocurrency via the CPU route requires a tremendous amount of energy, sometimes prohibitively so. ASIC miners are designed to mine one specific algorithm for one specific cryptocurrency, optimizing the entire process. In other words, the cost of ASIC hardware and energy required to operate it makes the process far simpler and more profitable than traditional CPU mining.
ASIC chips are very expensive, both to develop and produce. To combat this cost, in recent years ASIC mining farms have proliferated. ASIC mining farms are built in areas where energy is low cost and readily available, and can offset the high production cost of ASIC chips by offering extremely low-cost energy.