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As a Bitcoin miner since 2010, the hostility toward ASIC-based mining rig manufacturers has rarely made sense to me. ASICs strengthen your network. The requirem
by mrb 9y ago
As a Bitcoin miner since 2010, the hostility toward ASIC-based mining rig manufacturers has rarely made sense to me. ASICs strengthen your network. The requirement to have specialized hardware to mine profitably, hence pushing miners to the highest joule/hash metric physically reachable will make a PoW-based cryptocurrency much more secure with respect to majority attacks (so-called 51% attacks.) Cryptocurrency devs should welcome and embrace ASIC miners.
By far, the majority of GPU farms mine Ethereum. This mean any GPU-mineable coin other than Ethereum is trivially vulnerable to majority attacks. The only thing preventing these attacks from happening is the financial incentives against performing such a purely destructive attack.
ASIC-mineable coins are safe from such attacks from GPU miners.
People point out that the high barrier of entry into ASIC manufacturing can lead to monopolies, such as Bitmain which is a quasi- (not quite) monopoly with its 70-80% market share in Bitcoin with the S9. But first and foremost, manufacturing monopolies don't matter to the function of Bitcoin. A manufacturing monopoly isn't a hashrate monopoly: Bitmain cannot attack Bitcoin. They themselves only directly own <10% of the hashrate.¹
¹ Not to be confused with Bitmain's mining pools which represent more than a third of the hashrate. People usually misunderstand the function and nature of mining pools. End-users choose to mine at whatever pool they want. If Bitmain's pools started sending malicious mining jobs to stratum clients, the community would react and the end-users would promptly abandon them. So in practice Bitmain cannot do whatever they want for however long they want with their pools' hashrate. They enjoy the privilege of representing this hashrate, and this privilege could evaporate overnight.
- woah 9y agoHave these trivial attacks happened?
- madez 9y agoYou care about a safe front door even if nobody broke in through it yet.
- thaumasiotes 9y agoEmpirically, this is wildly untrue. I was just reading how indoor shops in Singapore often don't even have doors. If you're in the building, you're in the shops. Here in the US, it's very common to have a front door which is never locked. You care about having a safe front door to the extent that you anticipate future attacks. If you don't, then you don't.
- madez 9y agoYes, anticipation of future attacks is reason to warrant security measures, and that's what I tried to convey. More specifically, the fact that a trivial attack didn't happen yet is not always an argument against the need to anticipate that attack.
- madamelic 9y agoIn Monero, the idea is that hash power should be spread throughout rather than consolidated and fought over by high-power people. I see your point about ASICs raising the bar but wouldn't that put contributions out of reach of all but high-wealth or dedicated miners? Which is basically what has happened to Bitcoin. It is completely uneconomical for anyone but people with free to very cheap electricity and lots of ASICs. I believe the point of Monero is that power shouldn't be consolidated to a single few.
- mrb 9y ago«I see your point about ASICs raising the bar but wouldn't that put contributions out of reach of all but high-wealth or dedicated miners?» Not at all. ASICs don't increase the gap between the low-hashrate and high-hashrate miners any more so than GPUs. It's all proportional. If you have x% of the global hashrate, you get x% of the revenues. This is one of the biggest misconception in the mining world. You see journalists claiming that ASICS make mining tough for smaller miners. But this has absolutely nothing to do with ASICs. It all comes down to electrical costs: the large miners can afford to set up shop in area with cheap electricity while small miners have to make do with whatever rates they pay where they live/work. The difference between $0.03/kWh in Douglas County, WA (where many industrial miners are located) and $0.20-0.30/kWh in SoCal is huge. That's why large miners profit more. This would be exactly the same if the coin was GPU-mineable.
- wmf 9y agoThat's the argument from theory. OTOH some people are (over)reacting to perceived "abusive" behavior from Bitmain.
- pradn 9y agoIncreasing collective hash-power doesn't necessarily increase the decentralization guarantees of cryptocurrencies. It's more important that hashpower is distributed among many people.
- mrb 9y agoMy point wasn't about decentralization. It was about hashrate providing security. That's all. (Since you talk about decentralization, being GPU-mineable doesn't necessarily increase decentralization either. Bitmain could put 100 MW of GPUs into mining some random coin.)
- mrep 9y agoYou don't even have to buy the gpu's. Just rent them from AWS, Azure, and google cloud for the time it takes to carry out your attack. digiconomist [0] estimates that current etherum mining cost is 1.7 billion a year, or 4.65 million a day, or 194,000 an hour, or 3234 a minute. Multiply by 5 for cloud on demand premiums and you could dominate the etherum network for an entire day for 23.25 million. You could also do it for free if you can manage to do it with stolen credit cards. I'm amazed it hasn't already happened to a cryptocurrency. https://digiconomist.net/ethereum-energy-consumption https://digiconomist.net/ethereum-energy-consumption
- ericflo 9y agoThat's one of the reasons Google Cloud has fairly small quotas on everything now, and you have to request permission for more. They'd almost certainly stop approving you way before you got to $23m of GPUs, assuming they even have that many free in your zone.
- ericb 9y agoThe natural state of an ASIC mining arms race is that any advantage forces centralization. For example, if you have the most cost-efficient miners, you can acquire more miners with your profits. Your competitors fall behind with each iteration. This forces a monoculture of mining machines as miners are forced to use the best-available miner. This leaves the entire system incredibly vulnerable to back-doors and state interference from that manufacturer. Similarly, locations with the cheapest power force centralization of location, which forces centralization of state regimes presiding over miners. Monero doesn't suffer from these centralizing forces as applying generalized computing power can be done with spare cycles and is still profitable at the margin. In other words, you might not buy a computer to mine Monero, but if you have one, it might make sense to use your spare cycles for mining. This gets you a widely distributed polyculture, which is the best kind of decentralization.
- mrb 9y ago«Your competitors fall behind with each iteration» I don't think so. Competitors will always try to catch up given how profitable it is to sell mining rigs. We certainly have been going through a phase over the last 2 years where Bitmain has been dominant, but today we have 3 manufacturers who have miners just as efficient as the Bitmain S9 (0.10 J/GH): • Canaan who just released the Avalon 821 (0.11 J/GH) • Ebang E10 (0.10 J/GH) • Halong is promising a miner just as efficient in "2 months"
- FridgeSeal 9y agoBecause not everyone can afford ASIC's, which puts the mining power solely in the hands of those who can afford the hardware. This once again reduces the playing field to a small, powerful group of players and essentially no one else can participate. Doesn't this defeat the purpose of a decentralised currency based on not having "trusted nodes"?
- wmf 9y agoRealistically the cost of entry is more like $2,000 which is not a small, powerful group of players.
- t3soro 9y agoIt's not, though. You have the R&D costs of the ASIC, which you don't have to sell to the public, or can run them on your own schedule before releasing them for sale.
- FridgeSeal 9y agoYeah I've totes got $2k spare to use on just getting an ASIC, which likely won't have any resale value, and is only valuable for a very finite time Comparatively, I do have a nice graphics card (which I can use for gaming and stuff), and I can rent from cloud providers at price points I can afford if I wanted more access to cards.
- s73v3r_ 9y agoBut they're pushing the cost of graphics cards up in such a way that does the same thing, no?
- api 9y agoThree problems with ASICs: (1) Their higher capital cost, limited availability, and limited "appeal" promotes effective centralization of mining. (2) Due to #1 mining rewards go to fewer an fewer hands, promoting inequality and centralization of wealth. (3) ASICs increase the overall wastefulness of PoW currencies since they're e-waste. Mining ASICs are worthless for any other purpose, while CPU-mineable coins at least promote the production of things that are otherwise useful. If a miner liquidates a bunch of CPUs and GPUs they will see use on the market, while ASICs are junk.