State of the ASIC Market

What’s next for ASICs?

The annual Bitcoin conference, this year dubbed Bitcoin2022, always brings out the best and brightest of bitcoiners to the forefront. It’s usually the most anticipated bitcoin conference of the year and probably the longest-running bitcoin conference in history. The focus and theme are squarely on bitcoin but you’ll see a few “crypto” people wandering the halls as well.

The conference hosts dozens and dozens of panelist sessions boasting experts to share about some of the old and new things happening in the space. They touch on topics such as government regulation, open-source development, security, wallets, exchanges, and of course…MINING!

In the next few blogs, we’ll be recapping and sharing some of those specific mining-themed panel sessions with our community in a way that is informative and educational. Mining is constantly evolving and it is our duty to be on the top of the cutting edge tech to increase our competitiveness as well.

For this blog, we’ll start with talking about the state of the ASIC market. Below are the major talking points discussed around this topic during the panel discussion featuring Chris Mansano, Kristy-Leigh Minehan, Nishant Sharma, Yao XianJun, and Michael Francis.

What is the general outlook of the ASIC miner market?

The general consensus is that newer generation ASICs, such as the S19 and S19 Pro+ Hydro, are looking ready to be shipped out this year. These new ASICs boast a capability of churning out over 100 TH/S with the S19 Pro+ Hydrop capable of hitting 200 TH/S. The big manufacturers such as Bitmain, Canaan, and What’s Miner all seem to have a positive outlook on getting their miners shipped out in time for customers. This is of course contingent on any sporadic covid lockdowns and the what not, but for the most part, most manufacturers have a strong outlook this year for their particular ASIC models.

Are we going to get smaller ASIC chips?

The takeaway is that moving from a 7 to 9-nanometer chip size to something smaller, such as a 5-nanometer, isn’t really grabbing the attention of miners. And in fact, most of them have a neutral view on this, as if it’s not an important metric they are excited about. Rather they see getting to a small chip size is going to take longer than expected. So in actuality, a smaller chip size really isn’t something they are excited about.

Most miners anyways are extracting more value from the ASIC machine by doing their own physical adjustments and tampering with the machine once they receive it. This is common practice amongst miners. By tinkering and performing experiments with the ASIC machine, some miners have been able to gain more performance compared to those miners who just use the machine as is from stock.

So although a smaller ASIC chip size may sound appealing to outsiders and new miners, many OG miners have their own way of extracting more performance from each individual ASIC miner.

What has been the difference between the mining market of 2016–2018 compared to 2020 to 2022?

The mining market during the years between 2016–2018 can be characterized as still being green. Green means very very early. Many people getting into the space still didn’t understand the notion of mining, let alone understanding how bitcoin works. There was less education out there when it came to mining. A proper framework and blueprint for scaling industrial-sized mining farms just weren’t available or documented.

Local jurisdictions and local regulations are also more mature now. They understand the concept of mining and have some basic legal framework in allowing more leeway for new miners to come in and set up shop. What’s been learned in the past has been evolved in a way now to benefit both miners and the local community.

Mining manufacturers during that time as well weren’t probably scaled to handle hundreds of thousands of miners. It was a time when the bitcoin surge was quite unexpected and underestimated amongst many miner companies.

When we fast forward to the years 2020 to 2022, manufacturers have definitely been able to scale up operations, but the biggest setback was the pandemic. The pandemic, unfortunately, closed down a lot of operations and factories. Supply chains were cut short and disturbed. People were unable to leave their homes to see the whole process through.

Trends for mining at home.

We’re starting to see a lot of mining come back to the comfort of home. Many people new in the space that truly believe in the altruism aspect of bitcoin want to mine bitcoins on their own rather than having their miners “hosted” somewhere else. But despite the inconveniences ASIC miners may bring to a household, there have been many ingenious setups to mitigate the loud noise and energy consumption coming from ASIC machines.

There have been home mining trends such as immersion cooling, where ASICs are sat in a tub of special liquid allowing the miner to still run while muting the noise. If anyone has ever tried to run an ASIC machine at home, they’d be quick to realize the annoyance of the noise it can bring.

What to look out for from new manufacturers in the space?

There have been many new chips and ASIC manufacturers coming into the industry with the hopes of disrupting the power players of Bitmain and others. But there are some red and white flags people need to be aware of before doing business with any of these new players.

Red Flags that you need to look out for:

  • Do they open source their tech?
  • Can they explain how their tech works?
  • Does their tech look similar or different from their competitors?
  • Who is part of their founding team?
  • How do they plan to scale?
  • What is their roadmap?

All in all, ASICs still have a bright future in this space. It’s been the longest-running technology used for mining over the past few years and they seem to be staying for a lot longer. As in the past, CPUs, GPUs, and FPGAs were once a fad but then quickly faded away due to being obsolete, one can only wonder when ASICs lifetime will take an end. But for now, there is nothing more fitting than loud humming ASIC machines and bitcoin mining.

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