What Is an Application-Specific Integrated Circuit (ASIC) Miner?

An application-specific integrated circuit (ASIC) is an integrated circuit chip designed for a specific purpose. An ASIC miner is a computerized device that uses ASICs for the sole purpose of “mining” digital currency. Generally, each ASIC miner is constructed to mine a specific digital currency. So, a Bitcoin ASIC miner can mine only bitcoin. One way to think about bitcoin ASICs is as specialized bitcoin mining computers optimized to solve the mining algorithm.

Developing and manufacturing ASICs as mining devices is costly and complex. However, because ASICs are built especially for mining cryptocurrency, they do the job faster than less powerful computers. As a result, ASIC chips for cryptocurrency mining have become increasingly efficient, with the latest generation hashing at 158 terahashes per second but only using 34.5 joules per terahash.

Understanding Application-Specific Integrated Circuit (ASIC) Miners

Instead of being general-purpose integrated circuits—like RAM chips or PC or mobile device microprocessors—ASICs employed in cryptocurrency mining are specific integrated circuits designed solely to mine cryptocurrencies.

Initially, Bitcoin’s creator(s) intended for bitcoin to be mined on central processing units (CPUs) of commonly used laptops or desktop computers. However, Bitcoin ASICs surpassed both CPUs and graphics processing units (GPUs) because of their reduced electricity consumption and greater computing capacity. After gaining traction in mid-2013, when other hardware mining devices started hitting bottlenecks in their mining, Bitcoin ASIC miners increased and retained their lead.

A hash is a long hexadecimal number used to identify blocks in a blockchain, called the block header hash or block hash. To mine a block, miners begin adding values to a hash to generate new ones until a number less than the target difficulty (original hash) is reached. This is called hashing. The more hashes that can be performed in a set period, the more likely a miner is to earn bitcoin. ASIC miners are optimized to compute hash functions efficiently and quickly.

Although mining cryptocurrencies can be an expensive proposition of declining profitability, many people are drawn to it. Despite the uncertain return on investment, would-be cryptocurrency miners are willing to incur high upfront expenses for pricey ASICs and pay significant ongoing costs for electricity in return for the prospect of earning cryptocurrency.

Development of the ASIC Miner

Cryptocurrency mining is required by a proof of work (PoW) blockchain like Bitcoin to carry out its operations. The mining process involves solving a block’s hash by randomly generating numbers until reaching a number below the target difficulty number. The first miner to find the solution to the puzzle closes the block. Each winner in the bitcoin mining competition receives a reward (a specific amount of bitcoin) along with the transaction fees for the transactions in that block.

In Bitcoin’s early days, any computer with adequate processing power could mine bitcoin. However, those days are long gone; bitcoin’s soaring popularity and growing acceptance have attracted hordes of crypto miners.

At the same time, cryptocurrency mining has become exponentially more difficult because the mining difficulty changes as miners enter and exit the network. Over time, the number of miners has constantly grown, which increased the difficulty. These developments have resulted in a race to harness the most “hashing power,” the term used to describe how many hashes per second a miner can generate (or the combined hashes per second of a networked mining rig or pool). ASIC miners came about as a result of this quest for more hashing power; modern Bitcoin ASICs can hash at more than 150 terahashes per second (nine zeros, or 150 x 10¹² hashes per second).

ASIC devices were popularized by Bitmain (headquartered in China), which dominates ASIC Bitcoin mining activities through its Antminer ASIC product range.

ASIC Miner Advantages

Though GPU and CPU mining rigs rely on components that have more than one function, ASIC miners are designed for the sole purpose of mining cryptocurrency. This singular focus makes an ASIC miner much more powerful and energy-efficient than a comparable GPU miner.

Because each cryptocurrency has its own cryptographic hash algorithm, an ASIC miner is designed to mine using that specific algorithm. For example, Bitcoin ASIC miners are designed to hash the SHA-256 algorithm, while Litecoin (LTC) uses scrypt (pronounced es-crypt). Though this means that an ASIC miner could technically mine any other cryptocurrency based on the same algorithm, most miners who invest in ASIC hardware designed to mine bitcoin or Litecoin stick to mining that specific cryptocurrency.

ASIC Miner Considerations

Before investing thousands of dollars in an ASIC mining rig, here are some factors to be considered:

• What coins can be mined? The list of cryptocurrencies that can be mined with ASICs is far smaller than those that can be mined with a GPU rig. Cryptocurrencies that can be mined with ASICs include Bitcoin, Litecoin, and several others.
• Rig location: Though GPU mining rigs can be located in one’s home, ASIC miners are louder and generate much more heat. This means that one’s home is not ideal for an ASIC miner, and alternate locations like a basement or garage with cooling need to be considered.
• Power consumption: The latest generation of ASIC machines are more energy-efficient than GPU rigs but consume tremendous power nevertheless. An ASIC miner based in one’s home may necessitate upgrading the electrical wiring system to handle the increased power load.
• Choosing a Bitcoin mining pool: Mining pools enable miners to combine the power of their ASIC miner rigs to mine bitcoin and share the rewards for successfully minted blocks. Factors to be considered when choosing a pool include its reputation, size, and payment rules.
• Return on Investment: Is the return on investment sufficiently high enough to justify the upfront cost of an ASIC miner and ongoing operating expenses?

What Is an Automated Teller Machine (ATM)?

An automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Anyone with a credit card or debit card can access cash at most ATMs, either in the USA or abroad.

ATMs are convenient, allowing consumers to perform quick self-service transactions such as deposits, cash withdrawals, bill payments, and transfers between accounts. Fees are commonly charged for cash withdrawals by the bank where the account is located, by the operator of the ATM, or by both. Some or all of these fees can be avoided by using an ATM operated directly by the bank that holds the account. Using an ATM abroad can cost more than using one in the USA.

ATMs are known in different parts of the world as automated bank machines (ABMs) or cash machines.

Understanding Automated Teller Machines (ATMs)

The first ATM appeared at a branch of Barclays Bank in London in 1967, though there are reports of a cash dispenser in use in Japan in the mid-1960s. The interbank communications networks that allowed a consumer to use one bank’s card at another bank’s ATM followed in the 1970s.

Within a few years, ATMs had spread around the globe, securing a presence in every major country. They now can be found even in tiny island nations such as Kiribati and the Federated States of Micronesia.

Types of ATMs

There are two primary types of ATMs. Basic units only allow customers to withdraw cash and receive updated account balances. The more complex machines accept deposits, facilitate line of credit payments and transfers, and access account information.

To access the advanced features of the complex units, a user often must be an account holder at the bank that operates the machine.

Analysts anticipate ATMs will become even more popular and forecast an increase in the number of ATM withdrawals. ATMs of the future are likely to be full-service terminals instead of or in addition to traditional bank tellers.

ATM Design Elements

Although the design of each ATM is different, they all contain the same basic parts:

• Card reader: This part reads the chip on the front of the card or the magnetic stripe on the back of the card.
• Keypad: The keypad is used by the customer to input information, including personal identification number (PIN), the type of transaction required, and the amount of the transaction.
• Cash dispenser: Bills are dispensed through a slot in the machine, which is connected to a safe at the bottom of the machine.
• Printer: If required, consumers can request receipts that are printed out of the ATM. The receipt records the type of transaction, the amount, and the account balance.
• Screen: The ATM issues prompts that guide the consumer through the process of executing the transaction. Information is also transmitted on the screen, such as account information and balances.

Full-service machines now often have slots for depositing paper checks or cash.

How to Use an ATM

Banks place ATMs inside and outside of their branches. Other ATMs are located in high-traffic areas such as shopping centers, grocery stores, convenience stores, airports, bus and railway stations, gas stations, casinos, restaurants, and other locations. Most ATMs that are found in banks are multifunctional, while others that are off-site tend to be primarily or entirely designed for cash withdrawals.

ATMs require consumers to use a plastic card—either a bank debit card or a credit card—to complete a transaction. Consumers are authenticated by a PIN before any transaction can be made.

Many cards come with a chip, which transmits data from the card to the machine. These work in the same fashion as a bar code that is scanned by a code reader.

ATM Fees

Account holders can use their bank’s ATMs at no charge, but accessing funds through a unit owned by a competing bank usually incurs a fee. According to MoneyRates.com, the average total fees to withdraw cash from an out-of-network ATM was $4.55 as of 2022.

Some banks will reimburse their customers for the fee, especially if there is no corresponding ATM available in the area.

So, if you’re one of those people who draws weekly spending money from an ATM, using the wrong machine could cost you nearly $240 a year.

ATM Ownership

In many cases, banks and credit unions own ATMs. However, individuals and businesses may also buy or lease ATMs on their own or through an ATM franchise. When individuals or small businesses such as restaurants or gas stations own ATMs, the profit model is based on charging fees to the machine’s users.

Banks also own ATMs with this intent. They use the convenience of an ATM to attract clients. ATMs also take some of the customer service burdens from bank tellers, saving banks money in payroll costs.

Using ATMs Abroad

ATMs make it simple for travelers to access their checking or savings accounts from almost anywhere in the world.

Travel experts advise consumers to use foreign ATMs as a source of cash abroad, as they generally receive a more favorable exchange rate than they would at most currency exchange offices.

However, the account holder’s bank may charge a transaction fee or a percentage of the amount exchanged. Most ATMs do not list the exchange rate on the receipt, making it difficult to track spending.

The Bottom Line

ATM stands for automated teller machine. These are electronic banking outlets that allow people to complete transactions without going into a branch of their bank. Some ATMs are simple cash dispensers, while others allow a variety of transactions such as check deposits, balance transfers, and bill payments. The first ATMs appeared in the mid- to late 1960s and have grown in number to more than 2 million worldwide.

What Is an Arbitrageur?

An arbitrageur is a type of investor who attempts to profit from market inefficiencies. These inefficiencies can relate to any aspect of the markets, whether it is price, dividends, or regulation. The most common form of arbitrage is price.

Arbitrageurs exploit price inefficiencies by making simultaneous trades that offset each other to capture risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange by buying the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge.

In some instances, they also seek to profit by arbitraging private information into profits. For example, a takeover arbitrageur may use information about an impending takeover to buy up a company’s stock and profit from the subsequent price appreciation.

Understanding an Arbitrageur

Arbitrageurs are typically very experienced investors since arbitrage opportunities are difficult to find and require relatively fast trading. They also need to be detail-oriented and comfortable with risk. This is because most arbitrage plays involve a significant amount of risk. They are also bets with regards to the future direction of markets.

Arbitrageurs play an important role in the operation of capital markets, as their efforts in exploiting price inefficiencies keep prices more accurate than they otherwise would be.

Examples of Arbitrageur Plays

As a simple example of what an arbitrageur would do, consider the following.

The stock of Company X is trading at $20 on the New York Stock Exchange (NYSE) while, at the same moment, it is trading for the equivalent of $20.05 on the London Stock Exchange (LSE). A trader can buy the stock on the NYSE and immediately sell the same shares on the LSE, earning a total profit of 5 cents per share, less any trading costs. The trader exploits the arbitrage opportunity until the specialists on the NYSE run out of inventory of Company X’s stock, or until the specialists on the NYSE or LSE adjust their prices to wipe out the opportunity.

An example of an information arbitrageur was Ivan F. Boesky. He was considered a master arbitrageur of takeovers during the 1980s. For example, he minted profits by buying stocks of Gulf oil and Getty oil before their purchases by California Standard and Texaco respectively during that period. He is reported to have made between $50 million to $100 million in each transaction.

The rise of cryptocurrencies offered another opportunity for arbitrageurs. As the price of Bitcoin reached new records, several opportunities to exploit price discrepancies between multiple exchanges operating around the world presented themselves. For example, Bitcoin traded at a premium at cryptocurrency exchanges situated in South Korea as compared to the ones located in the United States. The difference in prices, also known as the Kimchi Premium, was mainly because of the high demand for crypto in these regions. Crypto traders profited by arbitraging the price difference between the two locations in real-time.