Modern mining farms use application-specific integrated circuits (ASICs), which are special-purpose chips customized to execute Bitcoin’s hashing algorithm. ASIC machines are designed for one type of work, unlike other general-purpose computing hardware used in earlier periods of the mining industry.
Bitcoin mining was first performed with general-purpose computing hardware that was capable of multitasking, even though miners only completed one task: generating hashes.
For its first couple years, bitcoin mining was done with central processing units (CPUs). Later, graphics processing units (GPUs) – a more specialized processor – were introduced. The ASIC market debuted in 2012 and quickly industrialized Bitcoin mining.
Increasingly specialized mining hardware was used as a result of Bitcoin’s increasing mining difficulty, which required miners to optimize for the efficiency of their hardware and increase their overall hashrate. General purpose processors quickly became too slow and inefficient.
Bitcoin mining ASICs are priced significantly higher than CPUs or GPUs given high design and manufacturing costs. A bitcoin ASIC’s specifications typically include a hashrate (e.g., TH/s) and an efficiency rate (J/TH), which are best regarded as estimates instead of absolutes since they can vary depending on how the machine is operated and maintained over its lifetime.