What is an ASIC miner?

An ASIC miner is a computer built around chips that do only one thing: run a specific mining algorithm as fast as possible. For bitcoin, that algorithm is SHA-256. Because these machines are designed for a single task, they beat general-purpose hardware by a wide margin at that task and are useless for almost everything else.

What is a bitcoin miner?

A bitcoin miner is any computer that competes to add the next block of transactions to the blockchain. The Bitcoin.org FAQ explains that each block must include a proof of work that takes a huge number of calculations to produce, and that the network adjusts the difficulty so a block is found roughly every 10 minutes. The winner earns new bitcoin plus transaction fees. For the full process, see how Bitcoin mining works.

In the early days, an ordinary computer processor could find blocks. Bitcoin.org now says the only cost-effective way to mine is with specialized hardware, which in practice means ASICs.

Why did crypto miners need GPUs?

Graphics cards (GPUs) can run many simple calculations at once, which suits repetitive hashing. According to The Next Web's history of mining hardware, public code for GPU mining appeared in October 2010, and miners soon built rigs with several cards on one cheap motherboard. Field-programmable gate arrays (FPGAs) followed in mid-2011, using about a third of the power of GPU setups for the same work. Later in 2011, ASICs arrived and turned bitcoin mining from a hobby into an industry.

GPUs stayed important for other coins whose algorithms resisted ASICs. The biggest of these was Ethereum, which relied on GPU hash power until September 15, 2022. That day, Ethereum's switch to proof of stake, known as the Merge, ended mining on the network and cut its energy use by about 99.95%, according to ethereum.org.

What is the difference between GPU and ASIC mining?

CoinTracker's guide sums up the trade-offs:

• Speed: ASICs deliver much higher hash rates on their target algorithm than GPUs can.
• Efficiency: ASICs use less energy for each calculation.
• Flexibility: an ASIC built for SHA-256 cannot mine a coin that uses a different algorithm, such as Litecoin's Scrypt. A GPU can switch coins or go back to gaming and video work.
• Cost and access: ASICs need a large upfront spend and are mostly run by industrial operations.
• Obsolescence: as difficulty rises and newer models ship, older ASICs can stop earning enough to cover their running costs.

This is why mining bitcoin on everyday hardware no longer makes sense for most people, a point covered in can you mine Bitcoin on a laptop. Many ASIC owners also join a mining pool to smooth out their rewards.