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What the New Ethereum ASICs Mean for ETH Mining & Future Proof Of Stake

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As we reported last month, cryptocurrency developers try to optimize their blockchains for standard computer equipment, to discourage large entities from cornering the market in mining their coins. Monero may hard fork to reject a Bitmain ASIC, and the developers of Ethereum have been trying to keep it ASIC-resistant. Bytom is embracing ASICs and the top manufacturer, Bitmain, breaking with tradition.

Despite community efforts, Ethereum will no longer be ASIC-proof. Bitmain is taking pre-orders for the Antminer E3, a 180 MH/s EtHash ASIC miner.

According to the website, power consumption is 800W, far less power required than a multi-GPU mining rig with the same hash rate. Although the entire crypto market was in a dip recently, rumors of this hardware making its debut may have helped to fuel the drop in the price of Ethereum, currently trading at just over $400.

The Ethereum ASICs retail at $800, with a limit of one per customer. With the limited availability, it is currently not a viable option if you’re looking to scale a digital currency mining operation, though the units are appealing for hobbyists as they pay for themselves rather quickly, due to the reasonable price tag and the hashing power. In contrast, an 8-GPU rig may cost several thousand dollars and consumes more energy. Keep in mind, GPU rigs are still profitable, particularly if you are in a location like Washington State where electricity is inexpensive.

The greatest risk to purchasing an ASIC is that a potential fork could render the units useless. Based on the news about this particular unit, this risk might be minimal, however there is another change on the horizon: Ethereum is switching to Proof of Stake (POS), replacing the current Proof of Work algorithm. In other words, you won’t be able to mine ETH in the near future, whether you have an ASIC or a GPU miner. That alone would render an ETH ASIC useless. GPU miners on the other hand, will still be usable for mining ZCash, Monero and plenty of other coins.

Make no mistake: Bitmain is an incredible technology company, and they have every right to develop new systems for mining digital currencies. Bitcoin ASIC mining isn’t going away, given that the algorithm is so difficult at this point that there is no other choice. The ultimate question regarding ETH ASIC mining is of course, what to do. If you have the capital to launch a large-scale cryptocurrency mining operation, then nothing changes at the moment. The ETH ASICs are in limited supply, so your only option for Ethereum mining at scale is GPU miners. If the units do become widely available, the choice again is probably to stick with GPU mining, given that the planned POS update to Ethereum will render the units useless. If on the other hand, you are a hobbyist, then it might make sense to pick up a unit. There’s still a window of time where you could possibly make your initial investment back.

In order to measure your own risk, take a look at the discussion on Github. There are already multiple solutions to blocking ASIC hashing that are being discussed. The general sentiment among developers is to “brick” the ASICs, punishing those who would invest in such technology. This is the same sentiment seen with regard to potential Monero and Siacoin ASICs. Given the sentiment, it’s a risk that many people will be unprepared to take.

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