ASIC resistance explained – Importance of coin with ASIC resistant
The key mechanism that lies behind Bitcoin, Ethereum, Litecoin or basically any Cryptocurrency is Blockchain. The entire idea of Blockchain is that it is downright decentralized, meaning there is no centralized power to control anything. All transactions are recorded ter a public ledger known spil Blockchain and all transactions are verified by so called miners who solve the blocks using their computational power. For such technology the danger of hacking the network and rewriting the values only emerges when a hostile force takes overheen more than 50% of the hashing power. Until unless the system is fully decentralized there won’t be a single point of vulnerability.
ASIC Machine – Centralization of crypto mining?
You may now ask how ASIC machine is linked to this subject? The history of crypto currency mining began with Bitcoin SHA256 algorithm. Followed by Litecoin Scrypt algorithm, then came X11 algo for Dash and Ethash for Ethereum. The main reason for switch ter different algorithm is to fight back purpose build hardware’s like ASICs (Application Specific Integrated Circuits) and FPGAs (Field Programmable Gate Arrays).
The original vision of Satoshi is that everyone should fairly contribute to the Bitcoin network so it remains distributed and decentralized. During the early stages there were only CPU and GPU miners mining and supporting Bitcoin. Spil the value of Bitcoin raised ASICs entered predominant the entire network making normal miners unlikely to mine Bitcoin using their consumer grade hardware. Thesis ASIC machines are developed by a few top Chinese companies which not only predominant the network but also taking all the power from petite miners. This earnestly lead to a threat of centralized mining hence the result of ASIC resistant came ter to picture.
What is ASIC resistant? Advantages of ASIC resistance
Recently wij’ve posted so many coin mining guides, especially wij focused on coins that are ASIC resistance. But wij simply failed to explain what is ASIC resistant and what does it mean for a Cryptocurrency to be ASIC resistant. Coin Guides main intention is to guide users of all kleintje so wij determined that before posting another crypto mining guide wij’ll very first explain ASIC resistance. Spil a long time miner you know the benefits of coins with ASIC resistant. However there are still a lots of fresh miners who still needs an explanation on ASIC resistance. Well, here is our opinion.
ASIC simply means a chip designed to do a particular task and nothing else. Ter the case of crypto currency they are developed for the purpose of mining specific algorithm. They are powerful, cost effective and energy efficient te terms of hashes. They are better than GPU mining and they are only good at that. There is no use for thesis machines rather than mining thesis algorithms. Whereas technically GPUs on the other arm is also an ASIC and their application is Graphic processing and output.
When a coin or Cryptocurrency says ASIC resistant, then it means there is no ASIC machine or solution developed yet to mine the coin. It can only be mined using consumer grade hardware’s like CPU and GPUs. Spil time goes someone may or may not develop an ASIC for that coin or algorithm because technically ASICs can be developed for any mining algorithm. It’s only a matter of time for someone to crack it and that’s why they never say ASIC proof but ASIC resistant. The best example that would gezond here is the Bitmain’s latest launch of most powerful ASIC for Cryptonight coins like Monero and Electroneum, menacing GPU and CPU miners. However Monero straks announced that they will hardfork the algorithm and that’s a different story.
So does ASIC resistance indeed lead to decentralization?
Are ASIC’s secure? Yes, ASICs are more secure compared to GPU te most cases due to the nature of their limited use.
If Bitcoin mining is predominated by ASICs then is Bitcoin centralized? Bitcoin is decentralized still and no, ASICs don’t centralize the network, humans do.
Very first of all, the main threat and cause of centralization is when the network faces 51% attack. This is the reason it is always advised to spread the hashrate on different mining pools. 2nd, all ASICs are developed by sketchy Chinese companies that have poor reputation due to their bad service and limited warranty. Not all miners trust them. Third, they only release a limited supply of thesis machines te batches so it’s hard to acquire thesis ter large amounts. Due to this and a large number of mining pools Bitcoin and most other ASIC coins remains decentralized.
So what use does coins with ASIC resistance have?
When a coin says ASIC resistance then it’s not only about decentralization but it’s more than that. It’s all about suggesting freedom and equitability te mining. It brings confidence to normal miners to mine using their average hardware trusting spil their investment won’t be betrayed. Due to broad range of access, miners will form a stronger community which naturally leads to the coin’s success. It gives everyone a equal chance to secure the network making the system totally decentralized, distributed and lightly accessible.
Wrap up: All crypto currencies are decentralized ter nature so love the freedom of choice. Ter the end it’s all about the community that brings success to a coin. Wij hope you loved this article. Spil always your thoughts and opinions are welcome. If you like then please do share this postbode. See you ter next article or guide until then glad hashing!