ASICs, or Application Specific Integrated Circuits, are computers designed to serve a specific task. For Cryptocurrencies like Bitcoin, ASIC devices are designed specifically to mine them. Bitcoin, being the biggest cryptocurrency by hash rate (almost 100 Exahashes) and having truly decentralized consensus (through worldwide mining ops), is an example of an ASIC-resistant cryptocurrency.
An ASIC-resistant cryptocurrency is one that is immune to ASICs (application-specific integrated circuits) that are designed for a specific purpose, such as mining. ASIC devices are designed to mine Bitcoin (or other cryptocurrencies) by using specialized hardware. Because of its decentralized nature, Bitcoin is not ASIC-resistant.
A cryptocurrency that is ASIC-resistant has its protocol and mining algorithm configured in such a way so that using ASICs to mine the coin is impossible or brings no significant advantage when compared to traditional GPU-mining. Using ASICs on ASIC-resistant cryptocurrencies may be even worse for your wallet than using the more conventional hardwares.
Since mining involves multiple attempts of finding a solution for a sort of mathematical problem, the job of an ASIC is to perform as many attempts as possible (i.e., as many hashing functions per second as possible). This means that using ASICs to mine Bitcoin or other Proof of Work cryptocurrencies is much better than using a general-purpose piece of hardware, such as a GPU card.
However, the process for making a cryptocurrency ASIC resistant is a defensive game, requiring continuous development and modifications. Because ASIC designers and manufacturers are always making new models of ASIC miners and sometimes, the newer ones are able to bypass the resistance of some cryptocurrencies.
It is worth noting, however, that blockchains that rely on other methods for achieving consensus (such as Proof of Stake, Proof of Activity, Proof of Authority) are ASIC-resistant by default. PoW cryptocurrencies are either resistant or non-resistant, depending on the mining algorithm implemented.
Application-Specific Integrated Circuit (ASIC)
A circuit is designed specifically for a particular purpose rather than one designed for general purposes.
ASIC-resistant coins, as the name suggests, are cryptocurrencies with ASIC-resistant algorithms. It has an ecosystem that prevents users from using ASICs. As a result, mining these cryptocurrencies using ASICs is almost impossible, so you won’t be able to mine. You could still try to extract them using an ASIC, but it wouldn’t be worth the effort. Some networks create ASIC-resistant cryptocurrencies to preserve and increase the level of decentralization of their blockchain systems. Others do so to make mining available to everyone.
Which cryptocurrencies are ASIC resistant?
Ethereum (ETH): Ethereum one of the most popular examples of an ASIC-resistant blockchain.
Monomer (XMR): Monero is another cryptocurrency designed to be ASIC resistant.
Ravencoin (RNV) is a fork of Bitcoin that uses an X16R hashing algorithm. However, in 2017, developers forked the original network and replaced the old KGW mining algorithm with the new KAWPOWS mining algorithm. This mechanism allows miners using GPU hardware to use their own memory and computing power. This update made Raven coin resistant to ASICs and achieved more decentralization, as any miner using GPUs could mine new coins.
Ethereum Classic (ETCH) is a hard fork of Ethereum that aims to maintain the original Ethereum blockchain’s integrity. Classic Etherium (ETH) coins were previously mined using a modified version of the original Ethereum mining algorithm called etchash. However, like Ethereum Classic, the Ethereum Classic team has also updated the network with a new algorithm called Keccak-256, which allows miners with up to 3 GB GPUs to mine Ethereum Classic again.
Vertcoin (VET) is a fork of Bitcoin (BTC), designed as a GPU mined coin to add more security and decentralized to the network. Lyracap is probably the most ASIC-resistant cryptocurrency on the market that uses a unique algorithm called Lyracap 2.0 v3. The reason is that the developers are highly committed to using a non-ASIC design because they decided to forked the project if someone could successfully build one. This approach discourages making an ASIC for Vertcoin because it would be too expensive.