According to a report, in the next five years, ASIC production is going to get big. In fact, some analytics believe that the chip market size will reach $24.7 billion by 2025. Microchip production walks hand in hand with technological progress. Apart from vehicle manufacturers and smart card producers, two other actively emerging industries, AI and blockchain have a taste for chip development and it’s only growing bigger. 

Microchip Basics

Microchips, just chips, or integrated circuits are tiny devices that are capable of processing computing tasks very efficiently. They are used for all kinds of tasks from storing data to rendering graphics and more. 

The best example of a microchip is the CPU, central processing unit, that basically makes your computer do all the complicated things that it does. CPUs are responsible for processing instructions and executing them. Although effective, they aren’t necessarily the fastest. Besides, with CPU the harder the task is, the more energy it requires. 

Aside from CPU, there are other types of chips that are capable of processing difficult mathematical tasks, so let’s review them.

GPU

A graphic processing unit, or a graphics card, gained popularity when video games stormed into our lives. Thanks to their parallel structure and the ability to process several tasks at the same time, GPUs do a much better job (roughly, six times better) than CPUs.

First GPU card designed specifically for crypto mining.

They were initially used for image rendering until the blockchain and AI industries came up with a different use case. 

APU

An accelerated processing unit is something in between a CPU and a GPU, a mix of both of them on one chip. They are more suitable for mobile phones and tablets but can be pretty powerful too. 

DSP

If you need to process audio, DSP will be the right choice. Those processors are great for handling continuous signals but won’t be any good for any other type of task.

FPGA

The mystical-sounding field-programmable gate array is one of the most expensive chips on the market. They are usually custom-made and built to perform certain tasks, but can, later on, be readjusted and programmed to do something else. Although highly efficient, FPGAs are not commonly used due to their price and complexity. 

ASIC

Application-specific integrated circuits are also built to handle a specific type of task. Although it’s not easy or cheap to manufacture, when programmed to solve a certain problem, ASIC is unstoppable.

Within time, people found new applications for certain types of microchips and the evolution game began.

Emergence  of New Tech

And just like that, it turned out that gamers are not the only ones who could use GPUs for their daily activities. It all started when Satoshi Nakamoto invented Bitcoin and used the idea of a Proof of Work consensus algorithm. Thanks to this algorithm, we can create a trustless network in which participants come to a common agreement about the state of the ledger by solving puzzles and getting coin rewards for their work. 

This way there’s no need for a controlling authority but instead, the participants of the network (nodes) are responsible for keeping the ledger immutable and relevant. But in order to get the right to add new data to the chain and get your reward, you need to solve a complicated mathematical task. Besides, you have to do it fast so you can be the first to solve it. And that’s why you need a powerful processor.

Antminer S19 by Bitmain with power efficiency as low as 23 J/TH.

Crypto mining started out small, and eleven years ago anyone could mine Bitcoin on their PC using a regular CPU. But the more popular it became, the more people joined the network. And eventually, the mining difficulty increased and the tasks got more complex, so instead of using CPUs, miners turned to GPUs.

In fact, GPUs were already being used by artificial intelligence and machine learning companies to analyze and process big amounts of data so no wonder it wasn’t long before graphic cards became a rare commodity. That’s how the need for designated equipment for crypto mining emerged. 

ASICs for mining Bitcoin were first introduced by Chinese hardware company Canaan Creative and it became obvious that general-purpose devices could never match the efficiency of a single-purpose device. Bitmain and other companies quickly seized the initiative and started designing, perfecting, and manufacturing ASIC devices for Bitcoin mining.

AvalonMiner1146 Pro by Canaan with power consumption of 3276Watts.

The chips eventually started to shrink and went down to the size of 7 nm (nanometers), as the smaller they are the less electricity they require. 5 nm chips have already been announced by Bitmain, Canaan, and Samsung by the year 2029 Intel promises to develop  2 nm and 1.4 nm processors.

However, the hardware wars are going to slow down as soon as the interest in Bitcoin continues to grow, mining becomes more and more competitive, and microchip functionality is still limited. Maybe, it’s only a matter of time before someone comes up with a breakthrough technology that will take mining and other related industries to a different level. 

The Bottom Line 

You can be skeptical about the future of the blockchain, crypto, and mining industries all you want, but it’s hard to deny that they‘ve pushed quite a few other industries forward.

Energy-efficient microchip production and the crypto space together with AI are co-dependent: one gives growth to another. And even if we hit a technological dead-end at some point, it will only break new ground for further development. Just like it always has. 

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