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ASIC and the Bitcoin Gold Rush

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ASIC and the Bitcoin Gold Rush

First off for those that are not aware of what a Bitcoin is, I will give a brief explanation.

Bitcoin or BTC, as opposed to USD, is a "cryptocurrency" by a pseudonymous developer(s) named "Satoshi Nakamoto".  Bitcoin is a digital currency and it's creation and transfer is based on an open source cryptographic system that is not managed by any type of central authority.  Bitcoins can be transferred electronicly via any computer or smartphone device without any type of financial institution or government issued currency involved.  Bitcoin is accepted by merchants and individuals alike in many different ways around the globe.

Recently Bitcoin has been rising in value at an alarming and dramatic pace and there has been a lot of focus on it by the US government and other governments due to it's encrypted anonymity.

A great video to watch about exactly what a Bitcoin is: http://www.weusecoins.com/en

Bitcoin Mining:

Bitcoin Miners use mining software to solve the encrypted blocks in the blockchain and are issued Bitcoins in exchange for their work.  Bitcoins can be mined solo or in mining pools for more "hashing power" to solve the blocks in the blockchain.  This provides a intuitive way to issue the currency similar to mining gold.  The supply is based on the Bitcoins that are mined by the Bitcoin miners.  Bitcoin miners help keep the Bitcoin network secure by having to confirm all of the transactions in order for them to be approved and accepted into the blockchain.

The hardware required to mine Bitcoins has been recently ruled by GPU mining and FPGA hardware devices.  GPU mining uses the resources from your graphics card to process the blocks.  FPGA (Field-Programmable Gate Array) is an integrated circuit designed to be configured/programmed by a customer for a specific purpose such as Bitcoin mining or many other applications.

A great video about what exactly Bitcoin Mining is: http://www.weusecoins.com/en/mining-guide

ASIC Mining Hardware:

Recently a new type of hardware device has been surfacing called an ASIC (Application Specific Integrated Circuits).  These devices are not field programmable and only perform one specific function, such as Bitcoin Mining.  Today, ASIC Miners are the new wave in the world of mining Bitcoins.  These ASIC devices mine at very high speeds, from 5 Gh/s (Giga-Hashes/s) up to 1,500 Gh/s, while only using very little power as opposed to FPGA or GPU mining which only does around 1 Gh/s avg with a GPU mining rig or an FPGA unit.

ASIC Miners are very new to the market and are only available from a very few select manufacturers such as Butterfly Labs, ASICMiner and Avalon.  As of this article Butterfly labs is beginning to ship their devices and Avalon and ASICMiner have just begun shipping units as well.

Links to a couple of ASIC companies:

http://www.butterflylabs.com
http://launch.avalon-asics.com
http://www.asicminer.co

The Future:

Will the Bitcoin become a viable and widely used currency?  The future looks bright, but there are a lot of obstacles.

ASIC mining is changing the landscape of Bitcoin mining forever and is perhaps the new techie "Gold Rush".  However please note that Bitcoin Mining is intended to be a hobby not a for-profit enterprise.  It is a risky investment to purchase expensive hardware and is just like any other investment, you could lose your money!
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