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Author Topic: Is The War Against ASICs Worth Fighting?  (Read 69 times)
krishnapramod
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April 07, 2018, 01:50:29 PM
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 #1

In March, Bitmain announced Antminer X3, an ASIC miner for the CryptoNight algorithm, Monero, and just a couple of days ago it was Ethereum's turn, Antminer E3, an ASIC miner for the Ethash algorithm. Monero committed to ASIC resistance from the beginning hard forked yesterday to maintain status quo and the ETH community is pondering over different possibilities. Although ASICs are far more efficient and profitable than GPUs, like Monero, a few cryptocurrencies consider ASIC resistance being a major specification and are focused on maintaining it, all because of Bitmain's monopoly over ASIC miner manufacturing. Is it unethical if Bitmain uses its own hardware for private mining and thus centralizing mining sector and getting control over majority of network hashrate? It is/isn't because it's a free market and lack of competition. If I am not wrong Application Specific Integrated Circuit can be built for any algorithm, it's possible, depends on a coin's market cap, mining revenue/profitability, and cost of manufacturing ASICs. So basically ASIC development is inevitable, and crypto communities looking to maintain ASIC resistance have to do periodical hard forks, but is this strategy sustainable for long-term? Obviously, the long-term solution is ASIC commoditization.

“ASIC commoditization” refers to an imagined marketplace in the future, where there are many different manufacturers producing ASICs of comparable power and price point.

But how long will it take for ASIC production to transform from monopoly to a truly competitive environment?

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All cryptocurrency developers who build public proof-of-work blockchains have to face the same challenge: Bitmain, a China-based chipmaker with a monopoly over ASIC miner manufacturing. Bitmain’s dominance over hash power and enormous influence is dangerous for peer-to-peer networks. It makes protocols vulnerable to censorship and rule-changes dictated by a single central authority, upsetting the checks and balances between the various stakeholders.

And yet — there are benefits to having ASICs on your network. Specialized hardware is extremely efficient, and boast far more hash power, and thus security, per unit of electricity. They’re more reliable than home-built GPU miners, and allow miners to specialize, professionalize, and scale up. Additionally, ASICs are algorithm-specific, and could align miner incentives better with a specific project compared to GPUs, which are much more flexible.

However, ASIC critics believe that silicon manufacturing is an inherently unfair game, where larger chipmakers can use economies of scale to undercut and extinguish competitors. In theory, ASIC-resistant networks wouldn’t be necessary if their creators believed the ASIC manufacturing industry could ever be a level playing field.

1. Why create ASIC-resistant networks?

As a result of ASICs, the idea of an average person mining profitably with their CPU or GPU disappeared. Bitcoin mining is no longer a purely decentralized and egalitarian pursuit, as it requires millions of dollars of capital to participate in. Only large mining companies have the resources to create a competitive ASIC, and they control the supply of this hardware to consumers. There’s a much higher barrier to entry to creating and using ASICs compared to GPUs or CPUs. Mining concentration from ASICs has resulted in pools controlling more than 51% of the hashrate at times, and Bitmain producing a majority of Bitcoin mining chips.

2. How does ASIC resistance work?

It’s important to note “ASIC resistant” doesn’t mean that making dedicated hardware can’t be done. It simply means that the mining algorithm makes it less economical or profitable to produce ASIC chips for the algorithm — not that ASICs are impossible to create.

The core of the disagreement around ASIC resistance comes down to your view on the chip manufacturing industry. Proponents of ASIC-resistance projects also believe ASIC commoditization is impossible, and that specialized hardware will always be vulnerable to monopolization at every step of the process (development, production, distribution). Their argument is that economies of scale and cheaper electricity will allow a few corporations to perpetually dominate the mining process. ASICs will always be fundamentally incompatible with the idea of a fair and distributed mining process, so pursuing GPUs make more sense.

3. Are ASICs inevitable?

In a successful and growing cryptocurrency network, ASIC development is inevitable. Even if the ASIC is not exponentially more efficient than GPUs, it becomes profitable at a certain point to create specialized hardware and mine it.

4. The risks of hard-forking away from ASICs

The most simple answer is to change the Proof of Work algorithm via a Hard Fork. ASICs (Application Specific Integrated Circuits) will only work for specific algorithms, so small changes can render them useless.

Changing the proof of work algorithm can successfully fend off ASICs once or twice, but the long term sustainability of this strategy is questionable. This game of ‘cat and mouse’ requires community consensus and good execution to keep tweaking the algorithm. As open source protocols grow and become more widely used, this consensus will inevitably be harder to achieve. At some point, community stakeholders might realise these constant forks are being done in vain.

Apart from requiring community consensus that will get harder to achieve over time, hard forking every time ASICs are conceived has many risks:

1. The introduction of new bugs or exploits, whether accidental or malicious in nature.

2. Hard forks will scatter the hash power on the network.

3. GPU mining is also susceptible to economies of scale and domination by vertically integrated companies like Bitmain.

4. ASIC developers could build more flexible FPGA designs that can adjust to small algorithm tweaks.

5. Can ASIC Commoditization happen fairly?

We are now starting to see increased competition and decentralization of bitcoin mining. This is due to a couple of factors:

Increased geographical distribution. Due to government crackdown, some mining operations are moving from China to Iceland, Canada, the US, etc.

An end to China’s cheap electricity policy.Cheap electricity in China allowed miners based there to undercut everyone else and make it unsustainable for those in other countries. However, the government’s crackdown has made this practice less common.

Other chipmakers such as Intel and Samsung have entered the game. Bitmain’s huge margins have forced other companies to get involved in the foundry business.

It’s taken bitcoin around 5+ years to begin this process, and it will take many more years to finish.

With Bitcoin’s price increasing 1000% in 2017, it’s inevitable that competitors will enter the chipmaking and mining market. Many new mining operations have sprung up, and many more plan to enter the market over the next year.

Bitcoin mining is trending towards decentralization and resembling of a commodity product, but this is a long and slow process. Samsung and Intel could eventually compete with Bitmain, but it will take a while.

6. What can we conclude about the future of ASIC mining?

Changing the proof of work algorithm often comes with costs and is a never ending game of cat and mouse. Developers can obviate this game by focusing on the creation of a fair and sustainable environment for ASIC production and development.

Allowing ASICs to develop means mining could be centralized for a time being while the market is immature. However, with the large margins enjoyed by Bitmain, other operations won’t be able to resist competing.

There is no easy way forward, but embracing ASICs is probably the best route.
ASIC commoditization is a very complicated issue, and determining whether it’s likely to happen will require more input from foundries, miners, and other stakeholders in the ecosystem.

https://tokeneconomy.co/is-the-war-against-asics-worth-fighting-b12c6a714bed

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April 07, 2018, 08:20:19 PM
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If I am not wrong Application Specific Integrated Circuit can be built for any algorithm, it's possible, depends on a coin's market cap, mining revenue/profitability, and cost of manufacturing ASICs. So basically ASIC development is inevitable, and crypto communities looking to maintain ASIC resistance have to do periodical hard forks, but is this strategy sustainable for long-term? Obviously, the long-term solution is ASIC commoditization.
It is possible to built the circuit for any algorithm but it is not that easy also, now can we take a closer look at this situation, the world knew about this new ASIC when bitmain revealed it to the world, i am sure they have made use of it and would have done private mining and made a substantial profit before releasing it to the public and i do not think these forking strategy wont sustain for a longer period.



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Hadji
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April 07, 2018, 08:26:21 PM
 #3

Each time the company Asic, come up with something new, from all stories I like about d3 x11 algo, when people asked to add the opportunity to mine something else, since the profit was not, but the price dash increased and all were satisfied.
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April 09, 2018, 02:22:23 AM
 #4

I think you are overestimating the risks of hard forking in the first place.  I mean, think about the time, money and effort that goes into companies, or other for profit small mining operations, to develop ASICs... To keep actively knocking them off the network, I think, will dissuade people from even attempting I would think.

Using hard forks as means to maintain the decentralized nature of the coin is far superior than letting more centralization to occur imo.

krishnapramod
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April 10, 2018, 07:38:26 AM
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I think you are overestimating the risks of hard forking in the first place.  I mean, think about the time, money and effort that goes into companies, or other for profit small mining operations, to develop ASICs... To keep actively knocking them off the network, I think, will dissuade people from even attempting I would think.

Using hard forks as means to maintain the decentralized nature of the coin is far superior than letting more centralization to occur imo.

Yeah, to maintain ASIC-resistance forking periodically would make developing ASICs cost-prohibitive, short-term approach, but at the same time if you look at the long-term sustainability of such an approach, the possibilities mentioned in this article and also by a Monero developer, Proposal to consider an ASIC-friendly proof of work, can't be ruled out. After the April 6th hard fork, now there are four Monero's.

Quote
1. Continued and repeated ad-hoc modifications to the PoW algorithm may accidentally (or even maliciously) introduce exploits.

2. ASIC developers may build in more flexibility to their designs to be able to accommodate small algorithm tweaks (indeed this may already be the case, we don't know).

3. Potential for favoritism/corruption if plans for tweaks are leaked or influenced far enough ahead of time that some favored ASIC developers may have enough lead time to produce ASICs, while others do not.

4. A belief that ASICs may be desirable as a means to facilitate industrial scale mining and growing the network beyond what might be called a hobby mining phase.

5. Potential for increased monopolization if the strategy is only partially effective (i.e. keeps all but oneASIC developer from succeeding)

6. Dependence of the network on continued frequent hard forking independent of the need for functional upgrades. This carries with it a greater degree of centralization necessary to design, implement and coordinate these forks, without any real plan to transition beyond it.

Unlike the Monero community, Sia community took a different approach/different perspective.

Quote
Bitmain has a strong track record in Bitcoin of actively working to undermine core development, blocking important network upgrades (Segwit), backing contentious forks (Bitcoin Cash), building in backdoors (Antbleed), and much more. We consider Bitmain a bad actor in the cryptocurrency space.

At the same time, we recognize that we have a conflict of interest. Our own Obelisk SC1 is now competing directly with Bitmain’s A3. Though we have the ability to release a version of Sia that invalidates the A3s via a soft-fork, we believe that doing so before Bitmain has attacked our network would be a centralized, monopolistic move, rather than a proactive, protective measure.

Therefore, we will not be supporting a soft-fork at this time.

At this point in time, choosing to fork would mean compromising on our values as a company and a community, even though Bitmain poses a serious threat to the Sia network.

ASIC-resistance or ASIC-friendly, Bitmain is a bad actor in the cryptocurrency space, but economically they don't have any incentive to attack cryptos. They made a profit of up to $4 billion last year. With Samsung, Halong mining, Baikal and other manufacturer's entering the market, ASIC commodization eventually will happen and Bitmain's monopoly will end so IMO hard forks or ASIC-proof algorithms are more of a short-term solutions.

https://github.com/monero-project/monero/issues/3387

https://blog.sia.tech/response-to-the-sia-community-and-bitmain-653a12284098

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April 10, 2018, 02:31:52 PM
Merited by krishnapramod (1)
 #6

A very important factor for crytpocurrencies to be widely adopted is for the network to remain robust and energy efficient. ASICs are by far the most efficient of the lot.
Imagine if a purely GPU/ CPU mining based coin becomes the de-facto standard then a company like bitcoin Bitmain would only have to covertly manufacture enough ASIC's to take over the majority hashrate. It's like the quantum computer attack before quantum computers are even possible..

It seems quite straightforward that there isn't many alternatives to ASICs in a truly developed and widespread crypto economy. You want the most efficient, highest possible hash rate to secure the network.

In this regard, A way forward is something like the Blockchain Defensive Patent License. Simply forking to avoid ASICs is a regressive step which will create more problems than solving them.


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April 11, 2018, 05:25:57 AM
Merited by krishnapramod (1)
 #7

As far as I know, CPU's are built around multi-tasking, integer operations, multi-threaded application support with boolean logic support in the form of branch prediction and other design facets optimized @ catering towards end userbility. Designing an altcoin which made CPU miners as competitive as GPUs or ASICs could be very difficult if not impossible as cryptographic functions may always be executed much faster and in fewer clock cycles with specialized GPU/ASIC hardware in comparison to an integer optimized CPU.

I'm not certain to what degree ASIC resistant networks carry potential to be effective. It is possible any attempts made @ sabotaging ASICs by modifying the design of altcoins could be defeated by manufacturers like bitmain with a simple software patch/firmware update.

The need for ASIC resistance to diminish their monopolization of the industry is decreasing with intel, nvidia, samsung, russians and others planning to enter the ASIC market anyway.

Does anyone think commoditization of the ASIC industry could drive ASIC prices low enough to make hobbyist mining viable once again? I don't think CPU mining will ever make a comeback but market competition creating new benefits for consumers could improve circumstances which could once again decentralize mining in a healthy way.

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