An Application Specific Integrated Circuit (ASIC) is a key part of cryptocurrency mining. But what is it and why is it so important to crypto mining? Here’s everything you need to know.

What is ASIC?

An Application Specific Integrated Circuit (ASIC) is a computer circuit that’s been customized for one specific purpose.

The easiest way to think about it is to compare it to a more general computer chip. Your computer’s internal hardware is designed to do a bunch of different tasks all at the same time.

On the other hand, an Application Specific Integrated Circuit (ASIC) is a powerful, focused integrated circuit. So instead of doing a lot at once, and spreading out its processing power, it completes one task at a time.

This makes it incredibly powerful and efficient.


ASICs first started showing up in commercial applications in 1981. At the time, they were used mostly in low-end 8-bit personal computers.

From there, its evolution followed more general advancements in computer technology. For example, as microprocessors and microchips became more powerful and smaller, ASIC capabilities.

ASICs Today

Today, they have immense processing power. In some cases, people build them into a system-on-chip. In essence, that’s when an ASIC includes microprocessors and some form of memory block.

Despite ongoing technological advancements, the core idea remains the same. An Application Specific Integrated Circuit (ASIC) is always a customized circuit built to complete a single, highly focused task.

Cryptocurrency Mining

What is ASIC (Application Specific Integrated Circuit)?

Most cryptocurrency miners use ASIC. Shutterstock

ASIC has proven revolutionary in cryptocurrency mining. Here’s a brief overview of how mining works:

  • In order to generate new coins, computers must process a huge block of data in order to solve a complex equation.
  • The person who eventually finds the right solution is rewarded with a new coin or part of a new coin. This process is called “mining.”
  • In order to arrive at the right solution, computers have to run through a massive set of possible answers. This requires a lot of processing power.

Initially, in the early days of cryptocurrency, a typical PC could mine fairly effectively. But that is no longer the case. As blockchain ledgers have grown increasingly complex, and as mining has become more and more competitive, miners must find ways to process data quicker and more efficiently.

And that’s where the Application Specific Integrated Circuit (ASIC) comes in. It’s perfect for crypto mining. It’s powerful, fast, efficient, and completes only one hyper-focused task. Today, the only real way to keep up with the demands of crypto mining is to use a powerful one.

How to Mine Using ASIC

Remember, ASICs are built for one specialized task. As a result, miners have to calibrate it to the algorithm specific to the crypto you’re trying to mine.

Each cryptocurrency has its own unique algorithm. This is what we call a “hashing algorithm.” Here are a few of the most important ones:

  • Bitcoin (BTC) uses the SHA-256 algorithm.
  • Monero (XMR) uses an algorithm called cryptonight.
  •  Ethereum (ETH) uses the Ethash algorithm.

To become an effective miner, your ASIC must run only the algorithm used by the currency you’re trying to mine. From there, it will take care of the rest. Theoretically, it will process data quickly enough to generate enough possible answers to turn a profit.


  • Speed
  • Efficiency
  • High powered computing
  • Hyper-focused only on mining
  • Can hash quick enough to make a profit from mining


  • High energy use
  • High electric costs
  • Significant carbon footprint

Mining Cryptocurrency with ASIC

Currently, anything besides ASIC is too inefficient and too slow to keep up with other cryptocurrency miners. Moving into the future, crypto mining will likely require even faster processing. As a result, expect to see an evolution in mining tech.

Alternatively, entirely new hardware could replace it. That would only happen if the new hardware is faster and more cost-effective.

Developers are also exploring new methods of generating cryptocurrency coins. In particular, a protocol called Proof of Stake (PoS) provides a more efficient means of creating cryptocurrency through “forging” rather than “mining.”