To properly understand ASIC-resistant, you need to know about ASIC first.
ASIC stands for an application-specific integrated circuit. These refer to integrated circuits formed to serve a particular use case, carrying out a specific computing task. In the cryptocurrency space, ASIC devices are engineered to participate in crypto mining.
Now coming back, ASIC-resistant refers to the property of crypto, which is “immune” to ASIC mining.
Let’s take a closer look.
ASIC-resistant cryptocurrencies: An overview
As the name suggests, ASIC-resistant cryptocurrencies are those coins which have ASIC-resistant algorithms.
Their ecosystem is developed in a manner which disables users from mining coins with ASIC machines. Hence, it is close to impossible to mine these cryptos with ASICs.
One may attempt to mine such cryptocurrencies using an ASIC, but there won’t be any significant return. Some networks generate ASIC-resistant coins to increase and preserve the degree of their blockchains’ decentralisation. But again, others do so to make mining affordable for all.
Mining involves multiple attempts at determining a solution for a type of mathematical problem. Therefore, an ASIC’s job is to make as many attempts as possible. This implies performing as many hashing functions per second as possible.
This indicates that utilising ASICs to mine Proof of Work cryptos is much better than using a general-purpose piece of hardware like a GPU card.
Cryptos and blockchain-based protocols using Proof of Authority and Proof of Stake consensus mechanisms are naturally ASIC-resistant.
A look at some ASIC- resistant cryptocurrencies
- Monero (XMR)
As Monero is an ASIC-resistant coin, no special machines are necessary to generate a new Monero. The privacy-based crypto uses a RandomX hash function and the CryptoNote protocol to develop new blocks. It is possible to mine Monero coins through GPUs and CPUs.
- Ethereum Classic (ETC)
Ethereum Classic is a hard fork of the Ethereum network that aims to maintain the integrity of the original Ethereum blockchain. These are non-ASIC coins that previously used EtcHash, a modified version of the mining algorithm of Ethereum.
But in the Thanos upgrade, the Ethereum Classic team updated the network with the Kecaak-256 algorithm, just like Ethereum. This allowed miners to have 3GB GPUs to mine Ethereum Classic.
- Ethereum (ETH)
Ethereum is ASIC resistant because the network uses the Keccak-256 hashing algorithm that rejects hashes from ASIC machines. This algorithm is engineered to generate only hashes for mining purposes and does not serve any other computing function. The Proof of Work hashing algorithm of Ethereum favours GPU units which are affordable and accessible.
Bottom line
Making a crypto ASIC-resistant is a defensive affair that requires continued modifications and development. This is because ASIC manufacturers and designers are constantly developing new models of ASIC miners. Also, sometimes, the newer models can bypass the ASIC-resistance of some specific cryptos.
