Two sides to every story: ASICs versus GPUs (part 4)

In the “Two sides to every story” series, we will examine current controversies and issues in the blockchain space. Instead of choosing sides, we will do our best to present information from both (or more!) sides of the argument. Then, you decide!

In this series, our mission at CryptoMurmur is to provide you with information to help you sift through the facts and make your own decisions about where you stand on a topic. In part 1 of the ASICs versus GPUs story, we examined the different tools that are used for the purpose of cryptocurrency mining. In part 2, we examined the controversial implications of this dilemma in regards to the issue of centralization versus decentralization. In part 3, we looked at hashrates, 51% attacks, and what role ASICs and GPUs play in regards to this.

Finally, in part 4, we will examine what developers of a range of cryptocurrencies are doing to address this issue. It should be noted that due to the fact that well over 1,000 different cryptocurrencies exist along with a broad variety of PoW mining algorithms, it is simply impossible to be exhaustive as we examine this topic. So, for the sake of efficiency, we will examine a few examples.

Also, it should be noted that there are a number of currencies that are pretty much entirely ASIC-mined, like Bitcoin. While it’s true you could mine Bitcoin with a GPU, it’s just not worth it when compared to the profits one can make from more GPU-centric currencies. Other major currencies like Ethereum can be ASIC-mined somewhat, but again, are not as profitable comparatively due to the memory-intensive designs of the currencies. One could argue, as discussed in more detail in part 3, that the dominance of ASIC-mining with Bitcoin is what has lent the currency such a high degree of security, due to its extremely high hashing power compared to all other coins.

But in this part of the series, we will focus on teams that have been outspoken in their mission to combat ASICs. And just for the record, this is by no means meant to shill, promote, or denigrate any particular currency, or its development teams. It’s just not possible to look at all the possibilities. Feel free to share your knowledge about projects in the comments! With that out of the way, let’s begin!

It was an alarming event for the team of Monero (XMR). Bitmain had done it. They had “cracked the code”, successfully designing an ASIC that would blow GPU miners out of the water. The all-new Antminer X3, mining on the Cryptonight algorithm, would deliver huge profits compared to meager GPU rigs. Offering a “discount” at $3,000, the new miner had excellent profit potential.

Monero’s response could not have been more clear. They had suspected that Bitmain themselves had been secretly ASIC-mining Monero for a while as evidenced by a spike in hashrates, now ready to unload their ASICs on unsuspecting buyers. Monero was ready for the change:

“We will perform an emergency hard fork to curb any potential threat from ASICs if needed. Furthermore, in order to maintain its goal of decentralization and to provide a deterrent for ASIC development and to protect against unknown or undetectable ASIC development, the Monero team proposes modifying the Cryptonight PoW hash every scheduled fork, twice a year…Finally, we will continue to research alternative Proof of Work functions that may provide better ASIC resistance than Cryptonight.”(source)

In response to Monero’s fork announcements, the price on the X3 was dropped to a fire sale value around $1,000 — still a relatively expensive doorstop, considering it would be virtually worthless without the ability to mine Monero. After the fork, it was left only to mine a few other relatively worthless currencies.

Thus, Monero successfully staved off an “ASIC attack” from Bitmain, purportedly retaining a greater degree of decentralization.

Other outspoken currency developers have joined in the anti-ASIC movement, sometimes referred to as the #FairMining movement, touted by entities at Digibyte and Vertcoin, among others. These currencies have used forking and highly memory-intensive algorithms to stave off ASIC-mining, generally with a high degree of success. That’s not to say that there aren’t ASICs that have been specifically designed for memory-intensive algorithms, but it is very costly to develop and manufacture these machines. And with the constant threat from developing teams like this who are ready and willing to hard fork their currencies on a regular basis, it becomes a question of how much money can be made before the gravy train comes to a halt.

That’s how a number of ASIC-resistant coins have managed to fight off ASICs. By simply having the looming threat that an algorithm can be changed, it makes it pretty tough for Bitmain and other ASIC manufacturers to be motivated to create ASICs for these currencies. This is why it’s been rumored that, from time to time, Bitmain employs its own army of dedicated ASIC machines, mining secretly before releasing to the public to avoid forking. It’s possible therefore, that ASICs are actually mining these currencies in secret, but not to such a great degree that a huge hashrate increase is noticeable. Having said that, once it does get noticed, Bitmain can simply offload the machines to the unwitting public before a fork is implemented.

Another solution that has experienced some success is multi-algorithm design. One of the more profitable coins right now at whattomine.com is Ravencoin (Digibyte also uses multiple algorithms, by the way) — a coin that, for many, has seemingly emerged out of nowhere. It’s an example of a multi-algorithm coin that rotates from time to time through a random sequence of algorithms, thus making it much more difficult to design an effective ASIC. That’s not to say an ASIC could not be designed for it, but it does make it tougher. It’s even possible that the team at Ravencoin could add an algorithm to the series to stave off such an ASIC.

As you can imagine, this requires developers — and ASIC manufacturers in this technological tug-of-war — to really stay on their toes in a race against ever-increasing demands. It will be interesting to see where this technology progresses in the coming years of development.

Well, that’s it! I hope you’ve enjoyed this series about the ASIC versus GPU debate. Now, armed with this newfound knowledge, you can feel free to pick a side and debate with your peers. If you want to share your thoughts and opinions on the issue, please do so in the comments!

Sources:
https://news.bitcoin.com/battle-algorithms-bitmain-sparked-asic-mining-war/
https://www.vtcmarket.com/vertcoin-join-the-fairmining-movement/
https://whattomine.com/