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What’s the Deal with Siacoin’s ASIC Soft-fork?

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What’s the Deal with Siacoin’s ASIC Soft-fork?

In the middle of the night (US time) on January 16, 2018 a popular manufacturer of ASIC mining hardware, Bitmain, announced its new line of “Blake2b miners.” To most, this means very little, but to the a large proportion of the Siacoin community this represents a moral quandary that is tearing those invested in the business apart. This “Blake2b miner” specifically targets the Siacoin blockchain.

Bitmain First to Market with Sia ASICs

Now, especially for Bitmain, targeting a specific crypto is nothing new. They sell many different models of ASIC mining chips for mining many different types of cryptocurrencies, the most popular being their bitcoin and litecoin hardware. However, every other mining product that Bitmain manufacturers contains the cryptocurrency it targets in the name. Why isn’t this new line of ASIC miners named a “Siacoin miner” then?

Sia is a crypto-based cloud storage solution owned and developed by the company Nebulous. Besides Sia, Nebulous also owns another subsidiary known as Obelisk. Now Obelisk is a new company that manufactures ASIC miners for both Sia and the Decred cryptocurrencies.

They began their presale for Sia-specific ASIC miners called “Obelisk SC1” ending with 3,598 sold and an announced shipping date of June 30, 2018. Just as this was revealed Bitmain, in what was the middle of the night for most of the Sia developers, began to sell their “Blake2b miners” with zero announcement, a promised shipping date of ten days and a refusal to disclose the amount of units sold except a notice that they sold out almost immediately.

By beating Nebulous to market, Bitmain have set themselves as the only current mining machine that targets the Sia blockchain. Halong responded by announcing their own miner but with no shipping date as of yet, “Worried about decentralization of SIA and other blake2b coins? We have a miner coming for blake2b: 3.5TH for 1000W with 135 chips, coming very soon.”

But with Bitmain being first to the post, it will have the effect of bolstering their mining pools in ways that the Sia blockchain is not prepared for, potentially leaving them vulnerable to the dreaded 51 percent attack. Currently Bitmain’s pool, “Antpool,” sits at just below six percent of the total Sia network hashrate, falling slightly from around ten percent.

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Source: SiaStats.info

However, Obelisk, as part of the same company that owns Sia has an ace up its sleeve. They have the ability to soft fork the network, which would invalidate Bitmain’s machines. However, there is a very small risk of a new coin emerging that will fork Sia to maintain compatibility with the A3; but to gain any traction, it would require an active developer team and get listed on some significant exchanges. 

Herein lies the problem. Though Bitmain has been accused of being a bad player on Bitcoin’s blockchain with underhanded tactics, such as mining empty nodes to increase their own mining speed but slowing down the network as a whole, these soft forks take time and any other users on the network would be disrupted as well.

Aside from this problem it sets a strong precedent that attempting to out-capitalize Nebulous’ hardware game will cause them to react by invalidating the machines that are causing the problem.

What Bitman has done is perceived as covert and somewhat underhanded, as they were obviously planning this and avoided naming their machines after the Siacoin to avoid being detected as long as possible. On the other hand, nothing they’ve done is illegal and beating a competitor to market is the nature of capitalism.

Still these sort of predatory behaviors into young blockchains are the sort of things that can and will decimate enterprising young businesses, and looking out for the health and safety of a community as it is starting may be an important message to send as more cryptocurrencies hit the market.

This issue with the Siacoin represents a much larger problem with smaller blockchains, as a company like Bitmain can disrupt the ecosystem in irreparable ways to turn a quick profit. The use of a soft fork, though controversial, sends a clear message to companies attempting this kind of behavior. This message says “We won’t tolerate this.”

Nick Hansen, co-founder of Luxor, writes that a soft fork should be delayed until early Spring, so that those who purchased Bitmain’s A3 will be able to make some money back on their hardware which will probably become useless when the soft fork goes ahead. With a petition to move forward with the decision garnering 196 signatures from the blockchain community, Nebulous have promised a response as soon as possible. The Siacoin community stated their intention to reach out to Bitmain to formalize a governance guidelines for the miners.

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