ASICs (Application Specific integrated Circuits) are pieces of hardware that are specially designed to serve one purpose. When it comes to crypto, they are designed to mine Bitcoin and other cryptocurrencies.
Graphic cards can also be used for mining, but when competing on the same level, ASICS render graphic cards obsolete. This is because ASICs are being used for mining only and thus have more mining power than graphic cards, that can have several functions.
If a cryptocurrency is ASIC-resistant, this means that the mining algorithm the coin is using does not have an ASIC solution that is superior to the traditional CPU and graphics card solution for mining. Essentially, the mining algorithm is set up in such a way that there is no advantage to using an ASIC for mining.
ASICs can be expensive to set up, but they are very power and energy efficient. They are the most efficient hardware performing the most amount of hashes. This is important because mining is all about solving complex mathematical equations.
It is far more cost effective to use ASICS to mine Bitcoin and most other cryptocurrencies that use the Proof-of-Work consensus mechanism. Bitcoin can not therefore be classified as being ASIC-resistant.
Cryptocurrencies and blockchain-based protocols which use other consensus mechanisms such as Proof of Stake and Proof of Authority are naturally ASIC-resistant. Examples of cryptocurrencies using Proof of Stake include Stellar and Neo.
ASICS are specifically tied to a mining algorithm, which is not the case for graphic cards. This means that if a cryptocurrency falls in value, changes its hashing algorithm, or a modified version of an ASIC is released, then the ASIC may become obsolete very quickly.
This isn’t the case for graphic cards. If it becomes obsolete for mining, it can still be used for other functions, such as gaming. This means that the average lifespan of a graphic card will likely be significantly longer than an ASIC.
ASICs are also so expensive to operate that mining is done through groups of miners in mining pools. The power that these mining pools can have an influence on the price and direction of a coin.
Some have pointed out the irony in mining pools which use ASICs having centralised power in their mining operations, which is the antithesis of the true nature of cryptocurrencies. However in reality, the sheer mining power of ASICS are too immense for ASIC-resistance to be prominent in crypto.