Lifespan of an Asic for mining

The year 2021 can be called the “golden year” of cryptocurrency mining. The exchange rates peaked, causing the hash rate of blockchains to grow rapidly. At the same time, ASICs – integrated circuits with huge computing power – became popular. Due to their high cost, they will not be recouped quickly, so it is worth considering the life of the asic. The equipment should work effectively for at least 2 years, otherwise it will not bring even minimal net profit.

What asics are used for

ASICs are integrated circuits for a single task. In mining, they are effective because they surpass video cards in hash rate by dozens of times.

The peculiarity of asics is in their components. Chips are devoid of unnecessary elements, unlike GPUs, which makes them more productive when mining on 1-2 algorithms. However, they cannot be used for other tasks.

This is both the advantage and disadvantage of ASICs. If popular blockchains change the consensus from PoW to PoS, as they did with Ethereum, millions of dollars worth of equipment will become scrap metal. This risk exists, but it is minimal because there will always be similar coins with familiar proof-of-work.

Usually asics are used in industrial mining of cryptocurrencies. They have a huge processing power and at the same time consume less electricity than video cards with the same hash rate. However, the relatively fast wear and tear of the equipment does not allow us to say that ASICs are an environmentally friendly device for mining.

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Developers of modern blockchains often oppose asics. The equipment leads to hashrate centralization and makes the network more vulnerable. ASIC-resistance and hybrid algorithms are introduced, reducing the efficiency of the devices.

However, this doesn’t mean that asics will disappear or lose efficiency. Manufacturers are refining the hardware to make it versatile. Devices get built-in memory, support for multiple algorithms and other features.

The importance of the lifespan of an asic for cryptocurrency mining

Another characteristic that you need to pay attention to, in addition to hash rate and power consumption. Net profit and the risk of not recouping the cost of the equipment depend on the life of the asic. Starting a farm requires large investments. The top integrated circuits from the WhatToMine rating are sold for more than 600 thousand rubles even in the conditions of falling prices for devices.

For an example, it is worth taking the best ASIC in terms of profitability in 2023 – Bitmain Antminer KA3. In Russia, it can be bought for $8.16 thousand. Daily profit after deducting electricity costs is $13.97. To recoup the investment at the current Kadena exchange rate, it will take 583 days – a little more than 1.5 years.

In addition to the return on investment, it is desirable to earn something else. Therefore, the ASIC should work for at least 2-2.5 years.

ASIC miner lifetime

On forums and profile sites, you can often find incorrect information about the duration of the equipment. According to many miners, the service life of an asic is 12-18 months. This does not correspond to reality. If the owner will put a quality cooling system, will not exceed the permissible limits of overclocking ASIC and will not forget about regular cleaning of the equipment from dust, the equipment will last up to 3 years.

The warranty service period is 3-6 months. During this time, breakdowns rarely occur, but factory defects may appear. If the device began to work worse, it is worth not to fix it yourself, but to hand it over to an official service.

Although technically an integrated circuit works normally for 3 years, you should also take into account the obsolescence of technology. The hash rate of popular blockchains is steadily increasing, as are electricity prices. As a result, the profitability of the operation is falling.

For example, ASICs from 2020 are now functioning only in the negative, except for iPollo G1. The 2021-2022 equipment has had variable success and is still generating revenue, but there are already stronger competitors.

Bitmain Antminer asics are performing best over the long haul. Several models of 2021 production year made it into the top 5 of the WhatToMine rating.

What does the lifetime depend on

This characteristic should not be confused with the length of service. In this case, it is precisely about the economic feasibility of using the device. If the integrated circuit works in the minus, it is worth turning it off. Perhaps in the future it will be able to bring profit, but everything depends on the exchange rate and hashrate jumps.

Complexity of the network

It is not easy to determine the exact term, how long asics for mining live. The key influence on it has a key influence on the complexity of calculating hashes. This indicator is affected by the hashrate of the blockchain – the total processing power of the connected equipment.

The larger this parameter is, the harder it is to solve the cryptographic problem. Consequently, the profitability of mining drops, as the probability of creating a block decreases.

Mining is a simple enumeration of numbers that are substituted into a predetermined formula and hashed. If the hardware finds the answer, the user is rewarded. This is how the Proof-of-Work algorithm works.

To prevent users from quickly getting all the coins, and the network was protected from a 51% attack, the developers implemented targeting. This is an important component of the hashing algorithm that determines the number of numbers that miners will have to go through on asics and video cards.

If the overall hash rate has increased, and the latest calculations were performed faster than last time, the target will make the work more difficult. It will add a certain number of numbers that will have to be searched. If, on the contrary, the hash rate drops, the complexity of the network will decrease along with it.

This indicator should be taken into account when choosing a device. It is worth looking at the supported algorithms, and then at the number of coins and their hash rate. Mining Bitcoin in 2023 even on an ASIC is a questionable idea. Due to the sheer processing power of the network, the top 10 schemes won’t yield much revenue.

The most profitable algorithms for mining on ASICs are Script, Handshake, X11, Kadena. Working in such blockchains, the equipment will steadily bring $6-15.

Mining complexity

This parameter is interrelated with the previous one. Due to the growth of hash rate and increasing complexity of the network, asics are losing relevance. It is harder and more expensive to mine a coin, since it is required to spend more electricity on calculations.

You also need to remember that there is halving – a planned reduction in the reward for creating a block. It was implemented in some protocols to protect the cryptocurrency from inflation so that supply never exceeds demand.

Author: Saifedean Ammous, an expert in cryptocurrency economics.