ASICs and large memory requirements [duplicate]

Question

People keep saying that proof of work functions like scrypt prevent ASICs from working because of large memory requirements.

What's stopping ASIC designers from simply building ones that have lots of memory?

Answer 1

Theoretically, you could produce an ASIC for every possible algorithm. It's done all the time by NSA, CIA and their kind for cryptographic purposes. Why has no company produced an ASIC for scrypt or to look for Cunningham chains? Return of investment!

Developing an ASIC for scrypt is harder than for SHA-256, this is by design. So designing the electronics is going to be costly, producing and testing the first test batches is going to be expensive as well.

For such a project to be done commercially, either: a) investors see a potentially big market of buyers for such an ASIC, or b) they sense a big investment opportunity in creating such machines for mining themselves a scrpyt-based coin.

For both situations to happen, scrypt-based crypto-coins need to become more popular/used, or their market capitalization increased substantially. Now that Litecoin has become much more high-profile (and its market capitalization a big chunk), and with Dogecoin, Coinye and so many other scrypt-based coins hitting the news, that there's a lot of interest in designing an ASIC for scrypt.

What surprises me is not seeing a team of teachers/students at any college in the world designing the electronics, getting a grant to create a few batches and finally either publicly releasing the gerbers or raising seed-capital to start a company based on the effort. I've seen a number of companies start up like this, have no idea why no one has tried it.

Answer 2

Production cost, an ASIC is a dedicated chip that does only 1 task and isn't programmable. Production costs for ASICS run into millions of dollars as it involves chip design, clean room manufacturing, and low yields (an industry average is that 50% of manufactured chips don't work and have to be trashed, can't be fixed). To create an ASIC for scrypt you have to have financial backing, that's why BFL and others did pre-orders. Scrypt is risky because ASICs for em would be the first and there's no guarantee people will buy your chips.