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What are ASIC-Resistant Cryptocurrencies – Phemex Academy

author: jeffrey craig date: September 9, 2021

Short for Application Specific Integrated Circuit, ASIC is a microchip designed for a particular purpose, such as a transmission protocol. in the cryptocurrency space, asics are used to calculate cryptographic puzzles, in particular, for mining new bitcoins. Because bitcoin mining requires miners to solve mathematical problems through complex computer calculations, asic machines are well suited. however, the crypto space is also full of cryptocurrencies that do not require asics to mine new coins.

Reading: Ethereum asic resistant

Monero hash rate chart

what are asic resistant cryptocurrencies?

asic resistant coins, as the name suggests, are cryptocurrencies with asic resistant algorithms. its ecosystem is built in a way that disables users to mine coins with asic machines. therefore, mining these cryptocurrencies with asics is almost impossible. You can still try to mine these coins with an asic, but that would not make any significant profit. while some networks create asic-resistant coins to preserve and increase the degree of decentralization of their blockchains, others do so to make mining affordable for everyone.

which cryptocurrencies are resistant to asic?

See also: How to Buy Crypto on Webull Right Now • Benzinga

ethereum (eth): Ethereum is a popular example of an asic resistant blockchain. the reason ethereum is asic resistant is because the network uses the keccak-256 hashing algorithm, which rejects hashes from asic machines. the algorithm is designed to only produce hashes for mining purposes and not serve any other computing function. Unlike bitcoin, which relies heavily on asics to mine new blocks, ethereum’s pow hash algorithm favors gpu units that are accessible and affordable.

monero (xmr): Monero is another cryptocurrency designed to be asic resistant. therefore, no special machines are required to create a new monero. the privacy-based coin uses a randomx hash function in conjunction with the cryptonote protocol to produce new blocks. While bitcoin is mostly mined from mining farms full of asics, monero coins can be mined via cpus and gpus. furthermore, the fact that monero is resistant to asic means that there has been a considerable increase in the hash rate of the network, which can be seen in the graph below.

What are ASIC-Resistant Cryptocurrencies - Phemex Academy

Monero (XMR) hash rate chart (Source: CoinWarz.com)

Ravencoin (RVN): Ravencoin is a forked version of Bitcoin that utilized an X16R hashing algorithm in the past. However, last year, developers forked the network and switched to the new KAWPOW mining algorithm. This mechanism allows miners to utilize the memory and computing capabilities of GPUs. This update made Ravencoin resistant to ASICs and helped it achieve more decentralization as new coins could be mined by anyone using GPUs.

ethereum classic (etc): ethereum classic is a hard fork of the ethereum network that aims to maintain the integrity of the original ethereum blockchain. ethereum classics are non-asic coins that previously used a modified version of the ethereum mining algorithm called etchash. however, just like ethereum, the ethereum classic team also updated the network with the kecaak-256 algorithm in their recent thanos update, which allowed miners with up to 3gb gpus to mine ethereum classic.

See also: What you need to know about staking Ethereum | ZDNET

vertcoin (vtc): vertcoin is a fork of bitcoin, designed as a gpu-mined version of bitcoin to add more security and decentralization to the network. It is probably the most asic resistant coin on the market that uses an asic resistant algorithm called lyrar2v3. the reason is that its developers are very committed to a non-asic approach because they have decided to hard fork the network if anyone can successfully build an asic. this approach discourages the creation of an asic for vertcoin.

asic resistant mining: reducing the threat of computing power monopolies?

Although blockchain networks have always been considered a decentralized technology, the 51% attack on the classic ethereum network demonstrated that computing power can still be monopolized. a large mining pool may employ dubious methods to increase their block rate above their compute power ratio by using an asic boost, eclipse attack, or other means resulting in 51% attack . this is exactly what happened in the case of the verge network (xvg). the blockchain suffered a 51% attack when a mining tyrant owned 10% of the total computational power of the network.

A similar attack on a large network like bitcoin is nearly impossible, but smaller-cap coins remain under threat of being monopolized. therefore, to avoid the problems caused by monopolies, many blockchain networks have adopted the concept of asic-resistant protocols.

In addition, proponents believe that ASIC resistant algorithms increase community participation by lowering the barrier to entry and creating a more secure and distributed blockchain ecosystem that is fair and accessible.

conclusion

cryptocurrencies that are not supported by asics can be mined using gpus and cpus, allowing everyone to become part of the network without buying expensive machinery. not only does it make a blockchain-based platform more decentralized, but it also makes mining more affordable. The crypto world has already begun the transition to asic-resistant consensus algorithms like proof-of-stake (pos) and proof-of-authority (poa).

See also: How to Mine Ethereum for 42 a Month Using a Host, and EIP-1559 Impact

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