A German start-up is looking for funding to produce a new high-performance microchip that it says would make bitcoin mining much less energy intensive, and thus cheaper.
This is important because ‘mining’ the cryptocurrency—essentially a process of solving complex mathematical problems —requires vast computing power and cooling systems so that the purpose-built processors, called application-specific integrated circuits [ASICs], don’t overheat.
Dresden-based ASICrising GmbH, which is in the process of changing its name to CoinBau AG, says it has found a solution to the problem: an energy-efficient, low-voltage chip that together with software will reduce by half the energy needed to mine bitcoin, the company’s chief executive Sebastian Krause told The Wall Street Journal.
The chip, called Wolfblood Extreme Efficiency, requires only 0.19 joules of energy for a gigahash—a mathematical equation of bitcoin mining computing power—compared with 0.37 joules per gigahash so far consumed by the most energy-efficient bitcoin-mining chip currently on the market.
Bitcoin mining chips are different from the computing microprocessors designed by U.K-based ARM Holdings ARM.LN +0.81% PLC, for instance, which are more complex than single-purpose ASICs. For example, the ASICs used for bitcoin mining are hard wired to do only one thing: calculate bitcoin algorithms as fast as they can.
The problem with a low-voltage ASIC chip, however, is unreliability—a side effect of running a processor with very low voltage. Designing energy efficient chips with the lowest possible voltage has been tricky in the past given that lower voltage supply tends to make chips less reliable. ASICrising, together with Dresden-based chip design company RacyICs GmbH, says it has developed software which finds the lowest possible voltage for individual chips within bitcoin mining farms – essentially a bunch of linked computers working on solving bitcoin problems. ASICrising says the software boosts the chips’ reliability and further optimizes its energy efficiency.
Rainer Böhme, Professor of economics and computer science at the University of Münster, said ASICrising’s design “would certainly be a leap, but not earth-shattering.” Progress reached in ASICs over the last two years are of much larger magnitudes than the halving of energy ASICrising is promising, Prof. Böhme said.
But all Bitcoin miners face the same problem: one day all the chips used for Bitcoin mining will be useless. When more efficient chips hit the market, their power leads to increased Bitcoin mining, which increases the built-in complexity of bitcoin algorithms—a structural design weaved into bitcoin by its creators in order to regulate its production and entrance into the market. Due to this, at some point, miners pay more for energy costs than they get back in bitcoin.
ASICrising said it has been collaborating with U.S. semiconductor maker GLOBALFOUNDRIES Inc., which will produce the chip in a factory in Dresden, if ASICrising can raise the $10 million -$15 million it needs to start production and cover other costs.
GLOBALFOUNDRIES wouldn’t comment on the project.