What Does ASIC Resistant Mean?

ASIC resistance is a characteristic of a Proof-of-Work (PoW) mining algorithm designed to make it difficult or economically inefficient to build specialized ASIC hardware for mining that specific cryptocurrency. The goal is to level the playing field, allowing individuals using readily available hardware like Graphics Processing Units (GPUs) or even Central Processing Units (CPUs) to compete effectively with large-scale ASIC mining operations.

How it Works

ASIC-resistant algorithms often incorporate features that:

• Require Large Amounts of Memory: ASICs are typically optimized for computation, not large memory stores. Algorithms demanding significant memory (like Ethash, formerly used by Ethereum) make ASIC development more complex and costly.
• Introduce Algorithmic Complexity: Using multiple, complex hashing algorithms or frequently changing the algorithm can deter ASIC development.

Purpose

• Promote Decentralization: By preventing mining dominance by a few large ASIC manufacturers or farms, ASIC resistance aims to keep the network hashing power distributed among more participants.
• Fairness: Allows smaller miners with general-purpose hardware a better chance to participate and earn rewards.

Challenges

• True Resistance is Difficult: Dedicated manufacturers often eventually find ways to create ASICs even for algorithms initially deemed resistant.
• Network Upgrades: Maintaining ASIC resistance may require periodic hard forks to change the mining algorithm, which can be contentious.

Related Terms

• ASIC (Application-Specific Integrated Circuit)
• Mining
• Proof of Work (PoW)
• GPU (Graphical Processing Unit)
• Decentralization
• Hard Fork