Bitcoin Mining

Although anyone can mine, the process has become so intensive that new hardware and chips are created which are designed to be exceedingly efficient at performing the SHA-256 hashing. ASICs (Application Specific Integrated Chips) became the norm for mining in 2014 and outcompete all other forms of hardware in terms of energy efficiency for Bitcoin mining. In the popular media, the computational power of these specially designed chips is often compared to the computational power of supercomputers, but ACICs cannot operate as general-purpose computers, so comparisons with supercomputers are meaningless. Only a few entities can mine profitably, usually using special purpose ‘mining farms’ clustered in areas of cheap electricity.

Miners use special purpose chips called ASICs that are specifically designed and built to be efficient at SHA-256 hashing. Commercial chip manufacturers have been slow to design chips  that are specifically built to be efficient at SHA-256 hashing, so demand has created an alternative specialised industry for supplying Bitcoin ASICs. The main provider of this is Bitmain, the same Chinese company who controls the top two mining pools. It has been estimated that Bitmain produces hardware that mines 70-80% of the total blocks in Bitcoin.