Mining

What’s the big deal with Ethereum ASICs like the Antminer E3?

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Simply put, the Antminer E3 is a super-powerful mining rig that could potentially put an end to GPU mining of Ethereum before the other thing that many assumed would eventually kill GPU mining: the move to proof-of-stake. But that’s an entirely separate conversation. For now, let’s focus on ASICs.

ASICs, for those unaware, are dedicated mining hardware aimed at optimizing efficiency and power to earn as much payout as possible. The image above is the recently-announced Bitmain Antminer E3, which goes for just north of $2,000. That’s not cheap obviously, but people are very willing to pay it.

The founders of Ethereum envisioned and engineered its blockchain to be “ASIC-resistant” — the hope was that ASICs would be impossible or prohibitively difficult to build.

As you can tell, that plan is starting to fall apart. Bitmain is hitting the market in the next few months with one of these powerful machines, and it goes without saying that it’s a threat to the decentralized nature of GPU-based mining. GPUs are (generally) affordable, ubiquitous, and easy enough for anyone to obtain.

That allows for way more nodes and more decentralization than other currencies, like Bitcoin, can achieve. The benefits are most primarily about freedom and equitability of mining. The idea is that coins that are ASIC-resistant will have more diverse and strong community, which will lead to the success of the coin. The idea is to avoid what’s happening with Bitcoin currently, where a select few Chinese companies practically control its future.

Simply put, the problem with this expensive, dedicated hardware is that it allows the most powerful miners or mining organizations to essentially create a positive feedback loop of control. Buy ASICs, gain more power and an ever-larger share of mining rewards, earn more revenue, buy more ASICs, and so on. They also lead to much higher mining “difficulty” which kills mining for everyone else — unless you own an ASIC made by Bitmain, that is.

So that’s the story with Ethereum ASICs. I don’t have a strong opinion on whether or not you should buy one except for one thing that I think is really important to remember. The long-awaited Casper update to Ethereum, which I mentioned at the top, is going to kill mining entirely. Vitalik Buterin, Ethereum’s founder, doesn’t see these ASICs as much of a threat, because he sees the update that kills them to be coming sooner rather than later.

Of course that means GPU mining for Ethereum will be killed too.

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The post What’s the big deal with Ethereum ASICs like the Antminer E3? appeared first on How to Mine.

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