Frequently asked questions on ASIC, pool, cloud and hosted mining

ASICs are purpose-built for specific algorithms, with circuitry optimised for that exact computation. GPUs must handle multiple instruction types and lack this specialisation. ASICs eliminate unnecessary components, reduce instruction overhead and operate at lower clock speeds with optimised power delivery, resulting in J/TH efficiency ratings several times better than GPUs for compatible algorithms.

New ASIC generations often deliver 20–40% better J/TH than their predecessors. As these units are deployed, network difficulty rises, so older machines earn fewer coins for the same power draw. Once electricity costs exceed mining revenue, legacy hardware becomes uneconomic even if it still functions. Short hardware cycles are therefore an inherent part of ASIC-based mining.

J/TH (joules per terahash) measures energy efficiency: how many joules of electricity are required to compute one terahash of work. Lower values mean lower electricity consumption for the same hashrate. Because electricity often accounts for 50–80% of operating costs, J/TH has a direct impact on whether a miner can be run profitably at a given power price.

ASICs generate substantial heat and rely on high-speed fans to move enough air through their heat sinks. These fans routinely operate at 75–85 dB, similar to a vacuum cleaner running continuously. In residential or office environments, that noise level is hard to tolerate without acoustic treatment or physical separation.

Each 1,000 W of power consumption corresponds to roughly 3,400 BTU/hour of heat that must be removed. Operating chip temperatures are typically specified below 70–75°C. Meeting these constraints requires adequate intake and exhaust airflow, stable ambient temperatures and regular cleaning of dust from fans and heat sinks. Without this, efficiency drops and hardware damage becomes likely.

Electricity price often makes or breaks mining. As a rough orientation, efficient modern ASICs may be economically viable below about $0.05–0.08 per kWh, while prices above $0.12–0.15 per kWh tend to render mining unprofitable unless coin prices are unusually high. Precise thresholds depend on hashrate, J/TH, network difficulty and fees, but expensive power almost always narrows or removes any economic margin.

Hashrate measures how many hash attempts your miner can perform per second; network hashrate is the aggregate across all miners. Difficulty is a protocol parameter that adjusts to keep block times roughly constant. When total network hashrate increases, difficulty increases as well, so each unit of hashrate earns less. Your hashrate determines your share of work; difficulty determines how hard it is for the network as a whole to find blocks.

Solo miners with modest hashrate can wait very long before statistically finding a block, which creates lottery-like income. Pools combine hashrate from many participants and distribute rewards proportionally, smoothing out variance. While the underlying economics are unchanged, payouts become more predictable, and many miners prefer that to the long dry spells of solo mining.

Cloud-mining offers frequently lack transparency about the underlying hardware, power costs and fee structures. Many documented schemes have changed maintenance fees after the fact, failed to provide evidence of real machines or collapsed entirely. Even where operations are genuine, contracts are usually written so that customers bear market and difficulty risk, while providers earn through fees regardless of long-term outcomes.

In hosted or colocation setups you typically own identifiable hardware placed in a third-party facility, paying for power and services. In cloud mining you usually only rent abstract hashrate or contracts. Hosted models can offer more transparency but bring their own risks: contract clauses, fee adjustments, jurisdictional issues and the operator’s long-term stability all become critical factors.

No. Some jurisdictions permit mining with few restrictions, others regulate it heavily or ban it outright. Rules may target energy consumption, environmental impact, financial regulation or taxation. Anyone considering mining must check local laws and keep an eye on regulatory changes; what is allowed today may become restricted in the future.

No. ASICs are designed for a single algorithm and cannot be turned into general-purpose computers or GPU replacements. Once they are unprofitable for their target algorithm, they have essentially no alternative use beyond scrap value. This lack of flexibility is a central part of the risk in ASIC-based mining.

In most cases, no. Mining is speculative, capital-intensive and exposed to multiple layers of risk. Funding miners or contracts with borrowed money or while under financial pressure amplifies downside if things go wrong. It is prudent to assume that the entire amount committed to mining could be lost and to limit exposure accordingly.

No. ASIC Shops is an information project only. It does not sell equipment, host miners, recommend specific products or provide individual financial, legal or tax advice. All decisions about investments and contracts remain your responsibility.