The blockchain community is stepping up the fight against ASIC, but Buterin doesn’t seem to mind

Published on May 18, 2018

The blockchain community is stepping up the fight against ASIC, but Buterin doesn’t seem to mind

ASIC miners became a potentially major problem even at the time of their appearance on the market. The emergence of specialized mining equipment for the SHA256 algorithm, which was an order of magnitude more efficient than mining on a CPU or GPU, significantly complicated the life of Bitcoin diggers and forced large “prospectors” to get involved in the race for computing power and cheap electricity.

But what exactly is the problem of ASIC miners? Why do new popular blockchains claim to be ASIC-resistant, and Ethereum polls whether to fork to protect against ASIC or not? Why is the community so ambiguous about ASIC - Satan-boxes, created specifically for mining specific cryptocurrencies?

If you rewind a little back and remember the covenants of the founding fathers, the cryptocurrencies were started as decentralized peer-to-peer networks with collective confirmation of operations. Obviously, the greater the decentralization, the more stable and efficient the whole system. However, the rate of cryptocurrency in the market introduced its own corrections to this paradigm.

In those beautiful times, when they asked for about $ 100 for 1 BTC (ie, 2013), the first ASIC miner for working on the SHA256 algorithm appeared on the market. Its manufacturer, the Chinese company Bitmain, actually changed the rules of behavior in mining: now in this market players with big capital felt much better who could afford industrial-scale farms and the purchase of ASIC, which were good for nothing more than mining.

It should be noted that the majority of relatively young blockchains, including Ethereum, have hashing algorithms that are in some way or other resistant to the use of ASIC equipment. For example, the developers of anonymous cryptocurrency Monero deliberately complicate the lives of ASIC manufacturers, making changes to the algorithm every six months. The bottom line is that even the slightest changes turn a specialized ASIC into a pumpkin: this hardware is optimized at the hardware level to extract specific cryptocurrencies and changes in the algorithm drastically reduce their effectiveness, sometimes making them useless. For example, in blockchain developers, it is extremely popular to create requirements for RAM, which is not so much in ASIC, unlike GPU farms. All this is done with one simple goal: keep decentralization and not allow big miners to seize control of the blockchain. The indirect reason is also prosaic: ASIC dramatically reduces the profitability of GPU farms, that is, it “knocks out” from mining small and domestic users who went in for cryptocurrency as a hobby or in search of passive income.

The overall trend in the fight against ASIC is confirmed by the reaction of the Ethereum community. One of the developers voted on his twitter, where the majority of the participants either spoke out against ASIC and for the Ethereum fork, either abstained:

At the same time opinions are not so clear. The same Buterin after the appearance of news on the creation of ASIC for mining Ethereum called for “nothing to do”, that is, to accept the appearance of ASIC miners in the network. Some users took this position as a betrayal of community values ​​on his part.

“To ensure that everyone is updated is like behaving erratically and distracting attention from more important things. On this issue, I personally strongly incline to inaction, ”said Buterin.

In fact, the new ASIC is not so dangerous, since it is 2.5 times more effective than GPU trusses. Recall that the first ASIC for BTC was much more efficient.

“It's just a more efficient computer,” said Buterin.

And who will win?

On the one hand, the use of ASIC miners causes obvious harm for the entire industry, since it leads to the centralization of the network, the emergence of such major miners that they simply “kill all life” around them. First of all, small miners who collect GPU-farms in their garages suffer.

The very blockchain paradigm and cryptocurrency implies the need for such type of miners in the network. It is decentralization and potential anonymity that is at the head of the “cryptocurrency angle”. At the same time, few a miner-amateur agrees to buy an ASIC that is far from expensive for the average consumer, which at any time can be “contorted” because of the next patch of the developers of the blockchain.

In this whole story, the situation with Bitcoin is extremely indicative, which is now meaningless, except on ASIC farms. The “main” cryptocurrency is becoming more and more centralized due to the increase in the capacity of specific mining companies. And the community has already come to terms with a similar situation in the case of Bitcoin, but if this happens with all cryptocurrencies, then this market will simply cease to exist.

On the other hand, ASIC farms are pushing blockchain developers not only to search for new network encryption algorithms, but also to refine alternative Proof-of-Work mining methods. This paradigm was called "clumsy" five years ago, but all the popular cryptocurrencies are still mined under the PoW protocol. The same Ethereum developers led by Buterin will soon plan to release the Casper protocol, which will save the network from the Proof-of-Work model and transfer it to the Proof-of-Stake model.

But even if the mass exodus of popular Coin from the PoW model to PoS does not take place, ASIC miners will not “capture” the entire cryptocurrency world. Now the majority of blockchains are “resistant” or “partially resistant” to mining with the help of ASIC equipment. This means that it either does not work at all, or it works approximately with efficiency comparable to GPU farms. If you familiarize yourself with the cost of ASIC solutions, you can understand that ordinary users will not buy illiquid bricks for $ 1,500 or more.

In any case, this struggle creates a competitive environment in the world of cryptocurrencies, where, on the one hand, there are major miners and equipment manufacturers, and on the other, blockchain developers and the community. The result of this struggle is likely to be a compromise that will suit all parties: manufacturers, major miners, and simple blockchain activists who assemble GPU-farms in the garage to become part of the digital economy.