Popular underdog cryptocurrency project Vertcoin has always been staunchly anti-ASIC. Now it’s released a blog post outlining a new hashtag and a social media campaign aimed squarely at Chinese ASIC manufacturer Bitmain. The campaign, called #FairMining, claims Bitmain has an unfair and largely destructive influence on bitcoin and other cryptocurrencies. So what is this fight all about, and what is the ideology that the ASIC resistance movement is following? We had a chat with one of the developers of the Vertcoin team to find out.
What Are ASICs, and What Is ASIC Resistance?
In case you don’t know, the cryptocurrency world changed significantly once specialized mining computers were created to mine bitcoin. These devices, called ASICs (which stands for application specific integrated circuit), are able to produce mining hashes at a rate many multiples beyond what any traditional computing hardware can do. And they do so at a lower electricity cost.
The end result is that traditional computing hardware like CPUs and GPUs become completely obsolete for mining, and only ASIC miners are able to remain competitive.
So far, ASIC mining hardware comes almost exclusively from China, and one company, in particular — Bitmain. The company is led by its sometimes polarizing CEO, Jihan Wu.
Some people, including the Vertcoin team as well as other ASIC resistant projects, believe that ASIC mining in general is far more harmful and dangerous than it is good. They point to the phrase in Satoshi Nakamoto’s original Bitcoin White Paper that says “one CPU one vote”, and claim bitcoin was intended to be mined mainly by individuals on personal computers.
Others, like world-renowned bitcoin commentator Andreas Antonopoulos, believe that the fear of ASIC mining is unfounded. Not only that, but Antonopoulos suggested that if ASIC mining hardware came from Sweden and not China, for example, that no one would care nearly as much.
With that out-of-the-way, let’s go into the accusations that the #FairMining movement is levying against Bitmain.
The Ideals of the #FairMining Movement
In the original blog post by Vertcoin (which was shared on Reddit and then promptly deleted by moderators for “brigading”), the Vertcoin team outlined their dedication to ASIC resistance, as well as commenting on the recent decision by the Monero dev team to initiate a hard fork in order to resist new ASIC mining hardware.
Needless to say, the Vertcoin team is in full support of that move. Specifically, they said that they “support Monero in their fight against the Antminer X3 and the fork happening in April.”
Most of the complaints the article makes against ASICs are relatively standard and quite well known to those on the anti-ASIC side of the argument.
They argue that ASIC mining results in centralization of resources which puts networks at risk. They also keep individuals and hobbyists locked out as they are not able to compete. Finally, ASICs put too much power over networks into the hands of those that make the ASICs.
The article also documented the threat that Ethereum mining could face, as well as the battle that Siacoin fought against Bitmain.
The lynchpin of the argument is a call to action. Specifically, the team urges all coins to “join the fight against ASICs and Bitmain for the security and continued decentralization of each respective [network].”
The Ideology of ASIC Resistance – Our Interview
To get a better understanding of not only the technical aspects but also the thought process behind their relatively well-known dislike of ASIC mining and Bitmain in particular, we spoke with a member of the Vertcoin dev team, Etang600, through the official Vertcoin Discord chat.
When we asked about the issues ASIC resistance in Bitmain, our source on the team told us:
“We generally see ASICs as bad. Currently, ASICs are controlled by one company, Bitmain. In the past there were a few others, but a few when out of business and I think one or two made enough from sales [that they] only mine for themselves now (they don’t sell to the public).”
Our source also noted another serious concern which, if true, is potentially troubling.
Does Bitmain Always Sell the Latest and Greatest?
Our source claimed that the ASIC mining devices Bitmain sells to the public are in fact already obsolete. Further, they alleged that what Bitmain does is first develop new top-end devices with superior hashing speed and efficiency, and then runs them at their own private facility for-profit for several months, before finally selling them to the public.
“What Bitmain does now is that they mine with the current generation ASIC miners and sell you the previous generation miners that have been used and [achieved ROI] for them already. So, they are selling people used, outdated miners that have a very slim to no chance of ever making ROI.”
This claim, which has never been proven, is possibly based on the fact each new generation of mining hardware tends to be slightly faster or more effective than previous generations. For example, and older Bitmain S9 device would have a hash rate of less than 10 TH/s (terahashes per second) whereas new devices on the market today can exceed 14.
Most who engage in bitcoin mining do so to earn a profit. However, in order to be profitable, one must be able to earn at least a return on their investment or ROI. Our source suggested it is extremely difficult, if not in many cases impossible, to ever even break even on your initial investment.
Our source also suggested it would be illogical for Bitmain to sell their best hardware to the public, saying:
“I can see the bright side of ASICs if the above didn’t happen, but generally it’s more cost effective for them to mine with the equipment than sell it. It’s like selling a money-printing machine.”
What’s Next for the ASIC Resistance Movement?
This argument is certainly not one-sided. Several cryptocurrency projects seem to have no issue at all with ASIC mining, such as Dash and Litecoin. At the very least, these currencies are not looking to hard fork in an attempt to protect themselves from ASIC mining.
Well-known bitcoin stalwart Cøbra wrote a scathing piece denouncing Bitmain and suggested the bitcoin community needed to react before it allows Bitmain to have ultimate control over the network. Andreas Antonopoulos responded, again appearing to suggest fears over ASIC mining are overblown — and perhaps even culturally motivated.
It’s obvious, however, that this fight is far from over. Cryptocurrency projects that have sworn to be ASIC resistant, including Monero and Vertcoin, and to some extent even Ethereum, have either outright promised or at least suggested that they too will perform as many hard forks as necessary in order to stay ahead of ASIC miners.
Developer Vlad Zamfir held an informal poll on Twitter, asking if the community would support a hard fork to prevent Ethereum ASICs from taking over. After 6,900 votes, the poll stood at 57 percent yes, 13 percent no.
Ten years from now, it will be very interesting to look back at these uncertain times to see what sorts of growing pains that cryptocurrency was going through. As for what we will see in the future for cryptocurrency mining? At this point, it could go either way.
Is ASIC mining bad for Bitcoin and others, or doesn’t it matter? Let’s hear your thoughts.
Images via Bitmain, Vertcoin
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