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Prior To Fork, ASICs Were Accounting For Majority of Monero’s Hashrate

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Prior To Fork, ASICs Were Accounting For Majority of Monero’s Hashrate

A few days ago, BTCManager ran a story on the Monero hard fork and how it might show if the blockchain had been secretly hijacked by ASIC miners. Suspicions over the way in which hashrate of the Monero blockchain had increased dramatically toward the end of 2017 when there was a general boom in the market led to speculation that there may already be secret ASIC miners on the network.

As a result, the development team at Monero was desperate to make sure that the scheduled hard fork made the blockchain even more resistant to ASIC mining.

The debate over ASIC mining and its place in the crypto ecosystem is one that is at the heart of the crypto evolution. Pioneers of cryptocurrency and blockchain technology held to libertarian ideals and philosophies which was greatly centered on decentralization. ASIC mining, however, undermines this decentralization philosophy as it creates the opportunity for monopolization and mining centralization.

Proponents of ASIC argue that a truly libertarian ecosystem is one in which no one is prevented from being able to express their economic potential. Thus, the practice of making blockchains immune to ASIC is seen as being anti-libertarian.

Examining the Evidence

On quite a number of discussion threads on Reddit, the online forum, members of the crypto community have been airing their views on what has been observed since the recent Monero hard fork.

The Monero hashrate decreased by about 80 percent after the hard fork. Before the hard fork, the hashrate which refers to the computing power expended during the mining activity stood at about 1,030 Mh/s. After the hack, it plunged all the way down to about 157 Mh/s. At the time of writing this article, the hashrate is somewhere around 525 Mh/s.

Source: https://bitinfocharts.com/comparison/monero-hashrate.html#3m

Some have tried to explain this significant drop in hashrate after the hard fork saying that operators of botnets might have been unable to join the hard fork update. There is, however, a great deal of skepticism to this explanation as the majority of responders tend to agree on the fact that the drop shows the activity of secret ASIC mining on the blockchain prior to the hard fork.

This is further confirmed by the fact that the latent hashpower has moved to the forks of Monero (yes, there’s four clones on the same, old Monero network) that resulted from the decision to boot ASICs from the network. “The 800 Mh/s that’s moved over the Monero Classic are not miners,” Riccardo Spagni, lead maintainer of Monero, said in a recent interview, saying that it is the ASIC manufacturers.

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The clone network, Monero Original, has over 680Mh/s at the time of writing, while Monero Classic and the other clones have a smaller hashrate.

Indeed, the overwhelming consensus among forum commenters on Reddit is that ASIC miners were secretly embedded in the network and that Bitmain might have even gone onto control 51 percent of the network.

Implications

At present, Monero was temporarily the most profitable cryptocurrency to mine beating even Ethereum, but the difficulty will take a while to stabilize. The changes that have been made to the CryptoNightV7 PoW algorithm used on the Monero blockchain seen to have catapulted the coin to the top of the charts, as the difficulty falls and profitability for hobbyist miners returns.

However, there are still concerns as to whether there are other blockchains that are secretly being monopolized by ASIC mining. According to a post by a user with the moniker “ferretinjapan,” the realization that there was a mining monopoly on the Monero blockchain is an unpleasant one. In fact, it was suggested that 33 percent of Monero’s hashrate was under control by one actor, opening up a possible 51 percent attack if there were no change in the protocol.

On a lighter note, BaikalMiner announced a clearance sale on Twitter offering a buy one, get five offer which shows the effectiveness of the move by the Monero community.  While the cryptocurrency community pointed out the short-termism of the move, there are longer-term solutions being discussed, for instance, a randomized Proof of Work that would change with every block.

Tevador and Howard Chu have proposed similar ideas, with the former stating:

“…the PoW would change with every block, and if the instruction set is broad enough to cover the majority of what current CPUs/GPUs implement in hardware, then any potential ASIC would be basically a CPU/GPU with similar performance.”

Going forward, Monero will eventually open up to ASIC mining, but Spagni said in an interview:

“Until we get to a point where ASICs are commoditized, the onus on us as a community, and a digital currency, is to resist them for as long as we can.”

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