In this chapter, we will take a look at mining with Application Specific Integrated Circuits or ASICs. They are microprocessors built for a single purpose. In the case of Bitcoin mining, they are built to perform the SHA-256 hash function that is used in Bitcoin. ASICs have a clear advantage over other mining hardware, as they are the fastest hashing machines (save for the still-theoretical quantum computer) designed specifically for the repeated hashing of candidate blocks.
ASICs can mine much faster than CPUs, GPUs, and FPGAs and are therefore more desirable to a potential miner. Furthermore, improvements in ASIC technology mean that even faster machines have been hitting the market in the last two years. However, the trend cannot continue forever; there is a limit to the hashing speed of an ASIC chip.
This is perhaps the most exciting chapter in our book. A vast majority of mining is currently conducted on ASICs; therefore, this chapter is extremely relevant to today...
Setting up mining software
In order to mine with an ASIC miner, we need to connect and configure it with a controlling computer. Most ASICs connect to a computer via a USB; therefore, with the use of USB hubs we can usually connect a large number of ASICs to a single computer. We will, of course, need the appropriate software and drivers to use our ASICs to mine.
We will present our tests here using a Butterfly Labs (BFL) ASIC; however, most popular ASICs connect and configure the same way.
There are many mining programs out there. Our favorite is cgminer. The GitHub repository can be found at: https://github.com/ckolivas/cgminer. The downloadable versions (for both Linux and Windows) can be found at the author's website: http://ck.kolivas.org/apps/cgminer.
We recommend using the latest version of cgminer to mine with ASICs; currently, (August 2015) the latest version is version 4.9.2.
Note
Note that the version of cgminer that we used for GPU mining was an earlier version...
Pros and cons of ASIC mining
Mining with an ASIC has its advantages and disadvantages. Let's examine these in order to understand if and when it is appropriate to use ASICs to mine Bitcoin. As you might recall, mining started on CPUs and then it moved over to GPUs, then briefly to FPGAs, and finally to ASICs. These machines are perhaps the last stop in hardware used for mining.
Currently, there isn't anything on the horizon that will replace ASICs any time soon. Quantum computers could theoretically be a candidate but such machines either do not exist or simply are not available to be acquired.
ASIC mining is the fourth (and perhaps the last) step in mining hardware evolution. Currently all the serious miners, including professional installations, use different types of ASICs to mine. They are the most energy efficient of all miners and of course, they are also the fastest hashing machines available. If you think of yourself as a serious miner, you should be running ASICs...
Best practices when mining with ASICs
Let us look into the recommended things do to when mining with ASICs. Mining is fun and it can also be profitable if several factors are taken into account.
Make sure that all your ASICs have adequate cooling; additional fans beyond what is provided by the manufacturer are always a good idea. Remove dust frequently as a build up of dust might have a detrimental effect on the cooling efficiency and therefore mining speed.
Note
For your particular mining machine, look up all the optimization tweaks online to get all the hashing power that is possible out of the device. Due to the large variety of mining machines, we cannot provide all the possible tweaks in our book.
When setting up a mining operation for profit, keep in mind that electricity costs will be a large percentage of your overall costs; hence, seek a location with the lowest electricity rates. Think about cooling costs; perhaps it will be the most beneficial to mine somewhere where the climate is...
Benchmarks of mining speeds with different ASICs
As we have mentioned earlier, the Bitcoin network hash rate is really high now. Mining, even with ASICs, does not guarantee profits. This is due to the fact that during the mining process you are competing with other miners to try to solve a block. If those other miners are running a larger percentage of the total mining power, you will be at a disadvantage, as they are more likely to solve a block.
To compare the mining speed of a few ASICs, look at the following table:
Table. 5.1: Comparison of mining speed of different ASICs
ASIC versus FPGA, GPU, and CPU mining
As you can see from a comparison between Table 5.1 and Tables 4.1, 3.1, and 2.1, ASICs hash much faster than any other hardware. The fastest in our list almost reaches up to 5500 GH/s. That is a significant improvement over the other hardware. This is due to the massively optimized nature of application-specific microprocessors.
Profitability of ASIC mining
In calculating your potential profit, keep in mind the following factors:
The cost of your ASICs
Electricity costs to run the hardware
Cooling costs—ASICs generate a decent amount of heat
Your percentage of the total network hashing power
To calculate the expected rewards from mining, we can do the following. First, calculate what percentage of total hashing power you command. To look up the network mining speed, execute the getmininginfo command in the console of the Bitcoin Core wallet. We will do our calculations with an ASIC that can hash at 1 TH/s.
If the Bitcoin network hashes at 400000 TH/s, then our proportion of the hashing power is as follows:
On average, a Bitcoin block is found every 10 minutes, so six per hour and 144 for a 24-hour period. The current reward per block is 25 BTC, therefore in a day we have 144*25 = 3600 BTC mined.
Note
If we command a certain percentage of the mining power, then on average...
In this chapter, we explored ASIC mining. We explained how to install the mining software and how to set up the appropriate drivers; cgminer was our software of choice. We set it up on both Linux and Windows operating systems. We also connected to a mining pool to make sure everything was working as planned.
We examined the advantages and disadvantages of mining with ASICs. It will serve any miner well to ponder them when deciding to start mining or when thinking about improving current mining operations. We touched upon the best practices that we recommend to be kept in mind.
We also investigated the profitability of mining, given current conditions. A simple way of calculating, on average, your earnings was also presented. We concluded that mining competition is fierce; therefore, any improvements you can make will serve you well.
In the next chapter, we will look at the details of solo and pool mining.
