ASICs or GPUs? A Dummy’s Guide to the Miner’s Million-Dollar Question

ASICs or GPUs A Dummy’s Guide to the Miner’s Million-Dollar Question

For crypto miners, the hardware is lifeblood. Whilst there are various types of hardware which you can use for mining an essential question these days is: ASICs or GPUs? The answer depends on how you look at the question, and what is important to you – so naturally draws strong opinions from many positions in the crypto-community. Here we take a look at both sides of the debate.

What do you like about crypto? The promise of decentralization? The prospect for security that comes from blockchain? The prospect of making some quick money? Well, whatever you answer is might indicate what your hardware of choice would be if you were to enter into the world of mining.

When it comes to the functioning of the eco-system, decentralization, and security don’t always go comfortably together and sometimes one comes at the expense of the other. The Application Specific Integrated Circuits (ASIC) or Graphics Processing Unit (GPU) question is at the heart of this dilemma.

GPUs are a more efficient version of the CPU of your computer. They don’t have quite as much flexibility as a CPU but this limiting in capability makes them much more efficient at the tasks they can do, crypto-mining included.

ASICs on the other hand, are custom made chips whose sole purpose is to mine cryptocurrencies. This is all they can do and this reduction in capability makes them extremely efficient at what they do. The capability of ASICs can leave GPUs well and truly in the dust.

The fact that they are so good at what they do also means they can raise the difficulty of mining to levels which makes the network very secure against, for example, 51% attacks.

Let’s take an analogy: imagine you want to make and sell, let’s say, saucepans. You have a machine, that with the push of one button can produce saucepans. You push the button once and a saucepan comes out, perfect and ready to use. This is an ASIC. Your friend also wants to make and sell saucepans. She has a welding torch and a saw. She can use these to make saucepans too, but it is going to take her much longer to do, so there’s no way she could compete with you. This makes you pretty secure in your market: no one’s putting you out of business.

Great, so just use an ASIC, right? No. The problem is you’re looking at four-figure price-tags, meaning that for most people, these things are out of reach. And here in lies the problem.

Since only a few people can afford ASICs, it leads to them being concentrated among very few people and mining pools which is a problem for decentralization.

This problem draws strong opinions from miners; ASICs which are built to mine a specific coin puts GPUs – which cost a lot less – out of business meaning that independent miners cannot compete.

This debate was captured during Coindesk’s Consensus 2018 event, in a panel discussion. Marco Streng, CEO of Genesis mining, stated, “GPUs are the most decentralized mining hardware we have on the planet,” a quality which is at the heart of much of the cryptocurrency community.

Meanwhile, Gideon Powell was more concerned with security especially in the face of potential interference from governments: “I don’t see the centralization issue going forward being a huge issue for bitcoin at all. Governments could give [GPU miners] a run for their money with 51 percent attacks … I like ASICs, they’re much more secure than GPUs.”

What you think of this debate shows where you fall on the crypto-ideology spectrum. Many fear government involvement and want to make the network as secure against possible interference as possible. Others cherish the democratic promise of crypto and see the future as one in which crypto works within and is fostered by government regulation rather than outside and away from it. In any case, whilst ASICS have dominated mining for the last few years, hard forks in currencies can render them useless. GPU’s flexibility means that they can be reoriented when forks occur. Imagine the market no longer wants saucepans but rather silverware – your friend might be in luck after all…

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