The Computer Chip Tailored To Mine A Specific Cryptocurrency
In the nine years that Bitcoin miners went from needing a personal computer to make money to requiring highly specialized, high-priced equipment to do the same, members of the Bitcoin community have warned of growing mining centralization. The concern is that easier access to profitability through expensive ASICs will drive mining into fewer and fewer hands. This could increase the threat of 51 percent attacks or other hijackings of the Bitcoin network and community. ASIC is short for application-specific integrated circuit. It is a computer chip tailored to mine a specific cryptocurrency, making it more efficient and more profitable. These chips have given rise to massive mining operations in China and other locales where the energy needed to run and cool the hardware is cheap. They use thousands of ASICs to very efficiently mine Bitcoin. The solution, some have suggested, is periodically changing the mining algorithm to confound existing mining hardware and force these highly invested, industrial operations to spend even more to keep up. This could put some out of business because they would have to update hardware with each algorithm change. ASIC mining could lead to Bitcoin centralization, some worry, while others say the problem will remedy itself. MINING FIELD GUIDE What is an ASIC miner? ASIC (Application-Specific Integrated Circuit) miners are machines that are specifically designed for mining. ASIC machines contain microchips that are specifically designed for solving hash puzzles in a much faster, and more efficient, manner than typical GPU-based miners.Popular blockchains like Bitcoin, Litecoin, Sia and Decred all currently have ASIC miners developed for their blockchains. Read More 11 In April, the Monero community executed a hard fork to change its mining algorithm in response to what it considered an attack by Bitmain that had introduced an ASIC designed to target Monero. Monero founder Riccardo “fluffypony” Spagni said in February that the hard fork was necessary because the Bitmain hardware couldn’t “be deployed fairly due to Bitmain’s complete and utter dominance, and nearly unending resources.” Bitmain was the only producer of ASICs until Samsung announced in April that it had developed its own version of the hardware. But Bitcoin advocate Andreas Antonopoulos takes a different view of this crossroad, saying Monero’s strategy will only accelerate centralization because only the industrial miners will have the resources to keep up. The Monero plan took this into consideration, and Spagni warned that the Monero community would change the algorithm every six months, which is about the time it takes for a mining operation to update its hardware in response to an algorithm change. This would amount to an arms race between the ASIC manufacturer and Monero. Antonopoulos thinks the benefits of ASICs are diminishing, besides which centralization comes with its own threats. He said those threats will reverse the trend toward more centralized mining. For instance, the greater the centralization, the greater the potential damage from a single threat such as a hack, a fire, a loss of electricity, and changing politics of wherever the mining operation is located, among a host of others. “I expect we will see that the centralization of mining is already reversing itself,” Antonopoulos said. “It’s going to take several years until that plays out, but we’re beginning to see the emergence of other manufacturers and other locations vying and competing for this.” And that’s already happening. The concern about Bitmain essentially cornering the market on ASICs, has lessened somewhat since Samsung entered the ASIC marketplace earlier this year.Charlie Shrem 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. 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