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And I would say X11. There is a lot of fear of ASIC being released soon for new algos just because people fear it, not because of the viability. It needs to be profitable before even starting R&D to create an ASIC. And we've all seen that R&D phase takes about 1 year , and another year to produce. Also the more an algo resembles general purpose comouting, the less attractive it is to develop one because the speed increase over GPU isn't as obvious. Therefor X11, even if it's the faster growing algo atm, it will need to become A LOT more mainstream before any thoughts of ASIC.
so you just kick the can down the road for a year and then what?
the 50 million market cap of X11 coins has already provided the incentive to make X11 ASICS viable and real.
there are already ASIC designs for multi algo chips that have 5 of the X11 algorithms. How hard could it be to add the circuits for the rest.
this is childsplay for chip design companies in china that can operate on a few million dollars a year.
merge mining solves the problem of A) attracting miners and B) keeping the network secure from 51% and timewarp attacks.
it also allows you to put up taxes because no miner is going to complain about higher taxes on coins they get for free while mining another coin....
the panic about ASICs is just that... PANIC and nothing else. hysteria is not a new phenomenon and anyone who knows about it understands that the last thing you should do is base financial and economic decisions on it.
While I totally agree about A) and B), could you explain to me the existence of free coins and what happens with them. Lets think about the hypothetical scenario with just two existing coins A and B, both are mined seperately, both have the same market price and for simplicity same number of coins. Now you change to merged mining. The group which mined A dumps B at market price and the gruop which used to mine B dumps A at market price, A buys coin A on the market and group B buys coin B. To my understanding the number of coins will not change (the difficulty will increase), the market price will be constant, every member of each group ends up with the same number of coins. The only difference is that they are mined by different persons (plus the network is more secure). Now where exactly are the free coins that you can tax and no one cares about it?
I think the scenario with 2 coins can be carried over to the reality, the outcome will not change. You can add different demand, more coins, different prices, dont think it changes anything.
Really, I am just trying to understand.
no worries buddy I will try to elaborate...
Merge mining is the process of doing Mining (PoW) calculations for one coin where the proof is then used to secure another coin or several other coins.
For example.
Bitcoin is mined... but you can also merge mine Namecoins if you choose.
Now lets say that you choose to mine Just Bitcoins...
lets say that with your new wizbang mining rig you manage to get 1 bitcoin per day.
if you mine Just bitcoins then thats all you get.. just one bitcoin a day..
however if you then decide to mine Namecoins which are merge mined with Bitcoin..
you would still get your 1 BTC a day plus some namecoins..
this is how merge mining works.. the same work (calculations) you did to find a block in Bitcoin is used to find blocks in Namecoin.
so if you merge mine Bitcoin and Namecoin then the namecoins you get are essentially free (because they dont cost you anything more to produce.)
now take that example and apply it to EMC2.
If Merge Mining was adopted, a person mining Litecoin for example, could also mine EMC2 at the same time. So the EMC2 they get are essentially free.
now given the choice between mining just Litecoin OR Litecoin and EMC2 (merge mined) most (but not all) miners would choose to mine both.
this means that most of the hashing power being used to find blocks and secure the Litecoin network would also be used to Secure the EMC2 network (so the difficulty and network hash rate would skyrocket)
This also means that since those EMC2 are being created for free by virtue of the shared proof of Work ie merge mining, most miners will still Merge mine even if you put the taxes up because they are still getting more coins than if they just mined only Litecoin or only EMC2.
the added bonus of course is that those miners get their hands on some EMC2 without having to buy them on exchanges.. so they become new users.
now according to network effect theory.. the more people you have using a product or service.. the more valuable it becomes. (you can read up on that if you dont already know about it... I don't think I need to explain it here) therefore getting EMC2 into the hands of more
so merge mining really does solve most of the problems a small coin like EMC2 could have.
If you think it all sounds too much like fantasy magic money theory... it really isn't.. just look at how Namecoin and Bitcoin merge mining works.. they were the first to merge mine but since then many other coins have gone down that path.
To answer the second part of your question I think your are a little confused about how markets work.. People may mine at a certain price and expect to sell at that level.. but that rarely happens. In a bear market Miners are forced to sell much lower than they were anticipating due to factors such as more efficient competitors and electricity bills or a crisis in confidence...
that's what is happening to EMC2 currently... many people mined thinking they were going to be able to sell at 800 satoshi are now being forced to sell at 133 satoshi because they either have financial commitments or simply lost their nerve. GPU miners are also competing directly with Scrypt ASIC miners who can mine the same coins for less than 10% of the power. The point is though, that the market (ie the collective wisdom of everyone participating) adjusts the price to reflect all of those factors.. (This is called Market efficiency theory)... so regardless of what action is taken, or not taken.. and what manipulation happens.. the market should in theory adjust back to its true value. That's really just a long winded way of saying.. you don't have to worry about the people who mined before a EMC2 switches over to a new PoW system and the people who mined after because the market will adjust accordingly.
in reality the only thing you have to worry about is growing the pie, increasing investor/user confidence and securing the network.. if you do that then the market and price of EMC2 will grow.
sorry if that was too long winded.. I do tend to ramble sometimes.
EDIT: BTW I was talking about the mining tax that is used to fund Einsteinium projects...
Wow, really good explanation
. thanks for the update.
