Recently, rumours on ASIC or an Application Specific Integrated Circuit have been floating around the Ethereum scene. There have been talks that the mining hardware developer Bitmain is planning to release the ASIC, specifically dedicated to mining Ethereum, in the second quarter of 2018. This news was responsible for the price of ETH dropping to its one week low value and sparked debate among the crypto community.
As the name implies, ASIC is designed for mining a particular currency at a significantly faster rate than conventional methods, such as Graphical Processing Units (GPUs). This gives the ASIC owners an advantageous position over their completion which goes against the core principles of cryptocurrencies.
Vlad Zamfir, an Ethereum developer, has posted a poll on Twitter, asking, “Would you support a hard fork that obsoletes ETH ASICs?” At the time of writing, 57% of nearly 7000 respondents said yes, while only 13% said unequivocally that they would not support the fork. Mr. Zamfir clarified that he was just curious and this was not a direct proposal.
Even though ASICs are undoubtedly the fastest and most efficient way to mine cryptocurrencies, unlike GPU chips, they can only be used in a single application and therefore even a small alteration in the algorithm of digital currency can quickly turn them from a money-making machine to a useless piece of metal and plastic.
So far, Ethash, which is used by Ethereum as well as numerous other cryptocurrencies, has been ASIC-resistant, which allows the algorithm to be mined using only GPU chips. Also, Bitmain’s development of Ethash ASIC seems particularly curious having in mind that Ethereum has already publicly announced its plans to transition to a Proof-of-Stake (PoS) algorithm.
Such a fork would not be unprecedented, as we’ve recently covered the privacy-oriented Monero (XMR) fending off ASIC miners by implementing a software update, designed to “slightly change the proof-of-work algorithm to prevent DoS attacks by ASICs.“
Bitmain is by far the most dominant force in the ASIC market, with an estimated market share of around 70-80%. Therefore, their development of mining hardware for new algorithms usually leads to heated debates about centralization, which has almost become a curse word in the crypto hemisphere. However, recently there have been rumours that other manufacturers are trying to enter the market and offer their mining solutions to compete with the monopoly of Bitmain.
According to Mikhail Avady, founder of TryMining.com, Ethereum has been one of the most profitable coins to mine using GPUs and the ASICs would affect market drastically and could even render GPUs obsolete, due to their comparative ineffectiveness.
It looks like most people do not welcome the introduction of ASICS to mine Ethereum and might turn to alternative GPU-friendly coins such as Monero or Zcash.
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