Bitmain has developed an Ethereum ASIC miner causing slashing of price targets for AMD and Nvidia while Monero deployed emergency updates to ward against ASIC mining.
Cryptocurrency mining was at one time a simple hobby among cryptography enthusiasts. Now, however, cryptocurrency mining has become a lucrative profession in its own right. Companies such as HIVE Blockchain Technologies run major mining operations in places like Iceland where affordable, renewable energy and equipment-cooling winds assist in their blockchain infrastructure endeavors. Companies like that are vital to cryptocurrency as a whole, because the process of mining is what helps verify transactions and add new blocks to the blockchain.
Even places which do not host their own physical mining farms seek benefits from crypto-mining. For example, some major websites use Java in order to harness the computing power of website visitors in order to mine cryptocurrency. Others yet deploy malware to enslave PCs without the users’ knowledge to command their power via a botnet toward cryptocurrency mining. In short, cryptocurrency mining is in high demand right now.
Up to this point, major technology retailers like AMD and Nvidia who deal in the types of computer hardware required for cryptocurrency mining, such as GPUs, have experienced significant boosts on the back of the crypto mining trend.
However, price targets are quickly being slashed for these companies by top Wall Street research firm Susquehanna after confirmation that Bitmain has created Ethereum ASIC miners.
What is an ASIC miner and why does it matter?
ASIC stands for Application-Specific Integrated Circuit. Basically, what Bitmain has created with its ASIC miner chips is a highly-specialized piece of equipment that is calibrated especially for Ethereum mining, although it would not be as effective for much else. Most crypto miners have used general computer equipment, most of which is advertised toward gamers who are seeking smooth experiences that require a lot of processing power.
Bitmain’s Ethereum ASIC miner is compatible with Ethash, the PoW hashing algorithm used by Ethereum-based cryptocurrencies, and will be available for shipment in 2Q18.
Monero’s stance on ASIC miners
Bitmain, the same company who is producing the Ethereum ASIC miners, also announced an ASIC miner for Monero last month but faced criticism from the Monero community and project lead, Riccardo Spagni.
Monero released a blog post promising to alter its code at least twice a year in order to ward off ASIC miner producers and users from the network and recently released an emergency software update for this specific purpose.
Potential problems ASIC miners can cause to cryptocurrency networks
Some people are worried about the barriers to entry that ASIC mining creates to crypto networks by reducing profitability for miners who have not purchased specialized hardware. Another fear is that this trend leads to increased centralization and increased susceptibility to malicious actors and 51% attacks.