China based cryptocurrency
mining hardware producing company Bitmain has recently announced that it has finally managed to develop an ASIC mining chip that can work specifically on the Ethereum blockchain network. ASICs are specialized computer chips which can undertake the task of solving the complex cryptographic puzzles that make all the transactions, validation and production of units possible on a cryptocurrency’s blockchain network.
The ASIC Problem
The whole point for cryptocurrencies
to come into existence was to decentralize the flow of money and to make the whole distribution system of cryptocurrencies an egalitarian affair. This way, there will be no more domination by centralized authorities that will dictate the cash flow and people will be free to control their digital financial assets in a fair ecosystem. All of that changed with the introduction of ASICs that essentially allow those who employ the use of these specialized mining chips to dominate the cryptocurrency mining
Bitcoin was the first cryptocurrency to come into existence and the one which was most afflicted by this problem. There have been many attempts to resolve the issue by introducing measures that can disregard the effectiveness of ASICs but companies like Bitmain have been advancing the hardware that they have been producing to keep up.
Ether No Longer ASIC-proof?
One thing that the Ethereum blockchain network had enjoyed for the longest time is the fact that its algorithms had made it impossible for ASICs to operate with too much efficiency in comparison to normal CPUs. This made the employment of ASIC chips irrelevant and it was enjoying a more or less egalitarian distribution of Ether on the network.
With Bitmain’s announcement that it has indeed developed an ASIC that can work well for the transactions on the Ethereum blockchain network, all of that could be seeing a change soon. The Antminer E3 chips which have been made by Bitmain will be available on markets for $800 per piece according to the announcement made on Twitter
Not A Surprise To Ethereum Creator
The creator of Ethereum, the young Vitalik Buterin, was not exactly surprised when the announcement was made by Bitmain about the new ASIC chips being developed. When Bitmain made the announcement about their new Antminer E3, the long standing speculation about such an ASIC coming into existence were just confirmed.
Vitalik always knew that no matter how good an algorithm was to properly manage the reward system for mining, it could never truly be completely ASIC proof. The technology was always going to catch up with the algorithm. That being said, there is still hope that the Ethereum blockchain network will prevail over the issue presented by companies like Bitmain introducing such specialized hardware to allow for the monopolization of the mining industry.
The devs at Ethereum have long been at work to make improvements to the algorithm in anticipation of the future problems which might occur due to specialized hardware like the Antminer E3. It remains to be seen whether or not the changes proposed will be of a more thorough nature but that is least likely to happen as that will be too extreme. The Antminer E3 hasn’t hit the markets yet so it still remains to be seen how much of an impact this new ASIC has on the mining industry on the Ethereum blockchain network.
is a Bitcoin pioneer, a social economist and digital currency trader. His work in this field is legendary. In 2011, at the dawn of the crypto era, he founded BitInstant, the first and largest Bitcoin company. In 2013, he founded the Bitcoin Foundation and serve as its vice chairman. Since then, Charlie has advised more than a dozen digital currency companies, launched and managed numerous partnerships between crypto and non-crypto companies, and is the go-to guy for some of the world’s wealthiest entrepreneurs. In short, he is the ultimate insider at the epicenter of the crypto universe.
is a premier advisory firm providing expert research, education and advice in the world of cryptoassets. The company is unique in that it combines the unparalleled expertise of crypto pioneer Charlie Shrem with the unparalleled market knowledge of three Wall Street experts with more than a century of combined financial industry experience. Together, they have managed and traded more than $1 billion in assets. In a world of "instant experts," who have little knowledge or trading experience, the Crypto.IQ team offers the proven depth, insight and knowledge to help their clients achieve success.
Raise your Crypto.IQ…and profit! Crypto.IQ gives you the insider knowledge you need to succeed as a cryptocurrency investor.
Get Started Now