Monero To Hard Fork In Face Of Encroaching ASIC Miners
A Chinese mining hardware company (no, not Bitmain) has released a new ASIC device designed to target the CryptoNight algorithm. For those who don't know, CryptoNight is the algorithm choice for the popular privacy coin, Monero. Monero is one of the few cryptocurrencies today that follows the philosophy that ASIC mining is bad for cryptocurrency at large. They instead believe that steps should be taken to resist ASIC mining. They have announced that they will (most likely) conduct a hard fork to change their mining algorithm to one that is even more difficult for ASIC hardware to be developed for. If another ASIC appears, they'll do it again.
ASICs: The biggest threat to Bitcoin today
Today, it is essentially impossible to mine Bitcoin profitably on anything besides hardware released by one single company, Bitmain. Not only does Bitmain have a virtual monopoly on selling hardware, but they also operate their own massive mining facility, and one of the most widely used mining pools in the world, Antpool.
This is incredibly dangerous for a number of reasons. Most notably, it causes a huge amount of centralization on the network. Further, it puts the network at great risk to attacks from Bitmain, or any official body that would nationalize or take over Bitmain.
To make things worse, Bitmain basically controls the future of the network at this point. Since they control the supply of mining hardware, they get to decide who gets it, and who doesn't. This means that only other large-scale miners that are willing to buy hundreds or even thousands of machines at a time are able to secure hardware at an affordable price.
Individuals, small companies, and hobbyists are basically left out. Their only choice to acquire mining hardware is to pay exorbitant, ripoff prices from middlemen that are able to buy up larger amounts of the devices at once and resell them for double, triple, or even higher prices. This pushes smaller players completely out of the field and inhibits decentralization, which is what Bitcoin was designed to be all about.
Cobra, one of the co-founders of Bitcointalk and bitcoin.org recently spoke out against Bitmain with a highly controversial blog post. In it, Cobra suggested that Bitcoin should, as a community, take steps to stop Bitmain from threatening the network and manipulating it in the way that it does today. His post was met with waves of both criticism and support.
Critical respondent Buck Rogers notes:
"Fear of Chinese. ROTFL."
Ron Gross has another take on the subject:
"Bitcoin’s proof of work algorithm cannot be changed. The result will not be Bitcoin."
And Alexandre Kral suggests that Cobra's idea is "ridiculously insane to try and attempt."
Monero wants to avoid the same catastrophe
Is Bitcoin a failure? No, quite the contrary, it's quite successful. But that may be only because it is in Bitmain's best interest that bitcoin continues to succeed.
But Monero, on the other hand, has an entirely different ideology. Monero originally was only mineable on CPUs. This meant that anyone with a desktop computer or laptop could mine it with some degree of success. More recently, GPU mining has become available for the CryptoNight algorithm, and now that is the norm. With the development of the Baikal CryptoNight ASIC miner, however, things changed.
If the Baikal miner is allowed to be released en masse and dominate the field, then it will become much like Bitcoin and Dash are now, where those without ASICs will be left in the dust and mining centralization will follow.
Why I'm in favor of a Monero fork
Monero has increasingly become more valuable as privacy tokens become more valuable in general. PIVX also saw a similar rise from just a few cents to up to $15 at one point, thanks to its own privacy features. Zcash has also seen steady growth.
Because of this rise in price and interest, ASIC hardware developers will inevitably try to cash in on this trend. However, with the exception of Dash, all of these privacy coins intentionally chose to use mining algorithms that were not ASIC friendly. PIVX went to the ultimate opposite extreme, choosing to eliminate mining entirely and instead rely solely on proof-of-stake.
If Monero wants to maintain its identity of being a decentralized privacy coin, then forking to prevent ASIC development is a smart move. Not only will it prevent this current batch of ASIC miners from being usable, it will also send a loud and clear message to ASIC developers that they are not welcome, and quite frankly, their devices can go to hell.
I support the decision for Monero to fork as a measure to prevent ASICs from dominating, and centralization taking over. I only wish that the Bitcoin community could someday come to such a consensus so that at the very least, Bitmain would not hold absolute power over the network and its future.
Is Monero right to hard fork, or is ASIC resistance a fool's errand? Let me know your opinion in the comments.