These $2,000 devices designed to mine Ethereum are selling out — and critics say they could weaken faith in cryptocurrency altogether

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So far, the device of choice to mine the ethereum cryptocurrency has been the traditional computer graphics card. 

That could soon change when specialized devices commonly known as “ASICs” are introduced in July, which are much more efficient at mining cryptocurrencies than graphics cards.

Currently, only one company called Bitmain is producing ASICs designed for mining ethereum. Each devices cost $2,150 and they’re sold out at the time of writing.

Developers behind the ethereum cryptocurrency are worried about the introduction of ASIC devices, according to a story on Bloomberg. ASICs “could have a negative impact on the Ethereum community and therefore on Ethereum price,” said Sam Doctor, a managing director at Fundstrat Global Advisors who spoke with Bloomberg. 

Check out what ASICs are, and why ethereum developers are concerned: 

SEE ALSO: How to make money mining bitcoin and other cryptocurrencies without knowing anything about it

First of all, a quick recap of what cryptocurrency mining entails and why people do it.

When someone is mining for cryptocurrency, they’re making their computers verify digital cryptocurrency transactions, like a ledger. Verifying these transactions involves solving incredibly complex mathematical problems. The problems are so complex that your computer is most likely just a small contributor towards solving the problem – it’s a mere “node” among several other nodes. 

Every computer that’s verifying cryptocurrency transaction is part of the ledger, which helps make cryptocurrencies become decentralized compared to the centralized nature of traditional banking. Decentralization is one of the main selling points for cryptocurrencies. 

The allure of tasking your computer to solve these problems and verify crypto transactions is getting rewarded with a small bit of the cryptocurrency itself. Built-up over time, that reward could be pretty tempting, especially when the price of a cryptocurrency skyrockets, like bitcoin did in early 2017.

A miner is rewarded because the process of verifying crypto transactions actually uses up a lot of electricity, which can run up your electricity bill quite considerably. Without some kind of incentive, there would be few reasons to pay higher electricity bills to mine cryptocurrency. 

The best way to mine ethereum so far is to use computer-graphics cards.

The standard graphics card is primarily designed to render the visuals and graphics of pretty much anything you see on your computer screen. That includes your operating system whether it’s Windows 10 or macOS, your apps, and video games. Graphics cards are also used by professionals for photo and video editing. 

These graphics cards are widely available consumer products used by pretty much anyone with a need for one. They can be bought at regular tech stores like Best Buy or at online stores like Newegg. 

It also turns out that graphics cards are good at solving the complex math problems to verify a crypto transaction. But they’re not as good as ASIC mining devices. 

 

ASICs are basically devices that are designed to do one thing, and they’re really good at it.

ASIC stands for “application-specific integrated circuit.” In other words, an ASIC is a device that’s designed for a specific purpose or use. By focusing on a single application, ASICs are often better than other devices that are designed around a broader set of applications. 

With that in mind, an ASIC can actually be any electronic device with a specific application, not just a cryptocurrency-mining device. Still, dedicated devices used for mining cryptocurrency are generally known as ASICs.

ASIC-mining devices are generally rectangular devices with barely any styling. Inside the utilitarian metal chassis are components that are much more efficient than traditional graphics cards at solving the math problems to verify crypto transactions because they’re purely designed to mine cryptocurrencies. Traditional graphics cards have a much broader job description than ASIC devices, like rendering the graphics for visually intensive jobs like video games and video editing, and so they’re not as efficient at mining cryptocurrencies as mining ASICs.

inside an asic mining device

You can think of it like the difference between soccer cleats and regular sneakers. Sneakers are extremely versatile – you can wear them pretty much anywhere and even play soccer with them. Soccer cleats, on the other hand, wouldn’t be comfortable for taking a walk. They’re specifically designed to offer traction and control on the slick grass of a soccer field, and they’ll offer much better performance for playing soccer, if that’s your intention. 

See the rest of the story at Business Insider

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