One of the hottest areas for Application Specific Integrated Circuits today is Bitcoin mining. A good friend of mine has a son who is involved in a Bitcoin start-up so we have been discussing this at great length and I will share what I have learned thus far. Coincidently, my wife asked me about Bitcoin during our most recent walk down the Iron Horse Trail. Since I had recently researched it (unbeknownst to her) she now thinks I’m the smartest guy in the world, so I have that going for me.
Bitcoinuses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.
If you don’t want to buy Bitcoins for $300-400 apiece you can mine them by solving increasingly complex problems. Bitcoin miners are paid in transaction fees as well as newly minted coins. Mining is a very compute intensive process by design so the number of new Bitcoins generated is manageable, secure, and somewhat tamper-resistant. The first mining wave used whatever CPU was on a desk or lap. GPU mining was next as it is significantly faster and required much less power to operate. In parallel FPGA mining emerged as an even lower power option to GPUs and were much more optimizable. Now ASICs are being used to mine Bitcoins which are proving to be vastly superior to CPU, GPU, and FPGAs.
ASICs have been around since the 1980s and have been a pivotal technology in the growth of the semiconductor industry. In fact, there is a dedicated ASIC chapter in our book “Fabless: The Transformation of the Semiconductor Industry”. The current success based ASIC business model, which was perfected by eSilicon, allows a minimum upfront investment with a royalty attached for packaged chips, which fits perfectly for emerging technologies such as Bitcoin mining. Current Bitcoin ASICS use 28nm LP to better manage power. The next generation FinFET based ASICs which are inherently lower power will be ideal for mining, absolutely.
If you want to get started in the Bitcoin world, just for research purposes and not for criminal activities of course, here is the best place: TRYBTC. Full disclosure: As you dig into the site you may notice that one of the creators was also an early developer for the Semiconductor Wikipedia Project.
I’m not personally convinced that Bitcoins will survive the onslaught of criminal attempts to control or use them. In fact, due to the huge criminal element that surrounds Bitcoin today, they could be made outright illegal. I am convinced however that there is money to be made selling Bitcoin related silicon. As with the California gold rush in the 1850’s, the miners didn’t necessarily get as rich as the people who supplied them right?
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