Ethereum ASIC Miners to Hit the Market as Bitmain starts taking Preorders

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The first Ethereum ASIC miners are about to hit the market, ushering in a new — and potentially disruptive — era for the second-largest cryptocurrency.

Chinese mining hardware manufacturer Bitmain announced on Tuesday that it was accepting preorders for the Antminer E3, which is believed to be the first ASIC miner compatible with the Ethash Proof-of-Work (PoW) consensus algorithm.

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These are the first Ethash miners capable of using Application Specific Integrated Circuit (ASIC) chips, which are dramatically more efficient than the general purpose GPU chips currently used to mine Ethereum, Ethereum Classic, and other Ethash-based cryptocurrencies.

But though Ethash was formerly ASIC-resistant, the announcement did not come as a surprise. As FusionX reported, Wall Street research firm Susquehanna revealed in a recent note to clients that it had confirmed Bitmain’s development of the Antminer E3 during a recent trip to Asia. Smaller manufacturers are also reportedly developing Ethash ASICs, though it is not clear when these will see a production release.

Bitmain advertises that the Antminer E3 will generate at least 180 MH/s. Though the miners have not yet reached the market, it is likely that Bitmain has already been using them privately, which — along with last year’s price uptrend — helps explain Ethereum’s dramatic hash rate increase in recent months.

ethereum asic miners
Source: Etherscan

Though some people view ASIC development as a net positive for the industry, others argue that ASICs centralize hashpower into the hands of a few corporations — specifically Bitmain, whose dominance is currently unrivaled.

The Antminer E3’s release will likely intensify calls for Ethereum to execute a hard fork to restore ASIC resistance, as Monero recently did in response to Bitmain’s release of a Cryptonight ASIC miner.

An Ethereum Improvement Proposal (EIP) drafted by developer Piper Merriam and published last week asked users to vote on whether they would support a fork to restore ASIC resistance. At the time of writing, the post had 934 upvotes and 37 downvotes — that’s 96 percent in favor and just four percent opposed.

Recently, GPU mining profits have started to dwindle, but a cursory check online for cryptocurrency mining discussions indicates that the lower profit margins aren’t scaring off the large scale-mining operations as fast as you might hope. Though, if history is any indication of the future, as it often is, Bitmain’s Antminer E3 Ethereum ASIC miner could disrupt the Ethereum GPU-mining market.

You may recall that several years ago, you could mine Bitcoin with your home PC. These days, it’s not possible to mine Bitcoin at a profitable rate with a standard PC. The Bitcoin mining market is now dominated by ASIC miners, which are engineered to do one thing: mine Bitcoin. These specialized devices are more powerful, and significantly more efficient at mining than graphics cards and CPUs.

Ethereum is a lot like Bitcoin, in that it is built on a blockchain with an immutable ledger, and it has a finite number of coins. However, Ethereum was supposed to be ASIC-resistant because it relies heavily on fast memory, whereas typical ASIC miners feature powerful processors that can crunch the numbers, but not much in the way of memory.

Bitmain didn’t reveal the full details of the Antminer E3, so we’re not sure how the company solved the memory challenge. However, the specifications that Bitmain did release indicate that the Antminer E3 ASIC miners will soon render GPUs obsolete for Ethereum.

Bitmain said the upcoming Antminer E3 ASIC would offer 180MH/s of mining performance and consume 800w of power, which is an unheard of level of efficiency. To put that into perspective, our scrapped together “profitable” Ethereum miner pumps out 93MH/s from a combination of one R9 380, one R9 380X, one R9 390X, and one R9 Fury. That machine draws roughly 950w from the wall, which is profitable, but the gains are dropping, and it may soon be untenable to operate it. Our system isn’t the most efficient miner, to be sure, but it doesn’t make sense to spend the money on an “efficient” GPU miner with 10-series cards.

The biggest death knell for the GPU Ethereum mining market is the Antminer E3’s price. Bitmain is asking $800 for each unit, which massively undercuts the current rate for a GPU-based system. To get 180MH/s out of a GPU miner, you would need six GTX 1080 Tis or nine GTX 1060s. In today’s GPU market, you’re looking at well over $6,000 (probably closer to $7,000 once you add power supplies and other equipment) to build a rig like that with GTX 1080 Tis, and roughly $4000 for the GTX 1060 rig. And that’s you can get your hands on the cards in the first place.

With those numbers, it’s easy to see that Bitmain’s ASIC has the potential to kill GPU-based Ethereum mining rather quickly. However, it’s too early to get excited about the death of GPU-based mining. There are many cryptocurrencies out there, and the death of Ethereum mining could simply direct GPU miners to another coin.

Bitmain expects the first batch of Antminer E3 units to roll out between July 16 and July 31. The company was accepting pre-orders today, but the first batch sold out before we caught wind of the announcement.