ASIC, The Ticking Bomb Of Proof Of Work Blockchains (Bitcoin, Monero...)
It happened first with Bitcoin Cash. With a lot of fuss and impressive marketing budgets, a part of the Bitcoin network switched to a new token, with an almost identical name and with claims that "this is the real Bitcoin", "this is Satoshi's true vision", etc, etc. In that team, an ASIC mining producer (I think you know the name, I won't get into details).
Yesterday, the same thing happened to Monero, only this time we're seeing not one alternative project, but 4. The technical details about Monero hardfork are well explained in the above article, I won't replay them.
The common theme in both hardforks is the presence (or the pressure?) of an ASIC manufacturer (yes, the one which will not be named in this article).
To be honest, I always thought it was just a question of time until the egalitarian geeky wet dream of a transparent, decentralized ledger will be blown away by good ol' human greed. You see, the blockchain can only store transactions and synchronize data and, perhaps, solve complicated, useless mathematical problems, but it can't fix humans.
Only humans can fix themselves.
And some humans have no interest whatsoever in fixing themselves, because, crushed by their enormous egos, they are actually enjoying this all pervasive greed which ruins everything around.
The only reason for Bitcoin Cash and Monero hardforks is greed. These hardforks are advertised as a step towards "decentralization", but in fact they are both an infection of centralization. Instead of giving everyone a say in the system, they are tilting the balance, with technological shortcuts, so the profits will start flowing more on one side. This is centralization. This is concentrating the power in the hands of a few.
And if you look back in history, this never ended up well.
A big part of the problem is that the PoW algorithm is way too vulnerable to human greed. The temptation of building specialized mining machines is simply too big to resist.
For what is worth, I don't think PoS, or DPoS, or BFT are immune to that, but they seem to be a bit more resilient than PoW. But for now, PoW tokens are dominating the cryptocurrency markets, so the stake is high. There is a big pie to be sliced, and big sharks love this kind of pie.
The first consequence of these hardforks will probably be increased confusion. There is already a lot of that surrounding Bitcoin, now we're gonna have even more of it, around Monero too.
The second consequence will be polarization. There will be "egalitarianists" - those who are not supporting ASICs, like Monero devs, who pledged to hardfork every six month specifically to make Monero ASIC resistant - and there will be "hardwarianists", which will consider ASICs normal evolution in a competitive market.
The third consequence is that the overall value of PoW tokens will decrease.
From that moment on, a big part of those who are already invested in crypto will start to realize there are other ways of minting tokens, from Proof of Burn, to Proof Of Stake (or, to bring Steem into discussion, Proof of Brain).
The main risk is that, by the time people will get over PoW, the crypto market might be quite depleted by confusion and polarization.
But I might as well be wrong.
Let's wait and see.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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While I disagree when Bitcoin maximalists say, "There will be only one chain", I think there is a kernel of truth there.
Power laws matter. But I think that will be within the various blockchains, which each offer different value propositions.
Specifically, I expect to see one main Monero chain (whichever that ends up being) taking up the vast majority of value, with the others eventually falling to less than 20% combined...similar to how BCH is currently only 10% the value of BTC.
I love the idea of asics. Wait here me out.
In theory, Asics are better than Gpu and maybe more decentralized. Asic= consistent hashrate and loyalty to the chain. Asic mean that you are not into only for the money but to help the chain since you can only use the asic for that. In gpu you can switch any time to other gpu coins. Many gpu miners are into only for the money by using nicehash and auto switch pools. Asic are supposed to decentralized by the the fact more than one company are making them.
Right now the problem with Asic is that one company makes them-Bitmain. If Halong mining is one of the few key reason why bitcoin was against changing the algorithm. It might be one of the last test to show if Asic can truly be decentralized in theory.
I kinda like POS(crying out load bitcoin is going to use POS in its sidechain tech . )
But current POS has a flaw who know it could be made better. People are researching them. DPOS does look like one of the best types of POS
Currently POW is better in my opinion.
While yes POW does seems like an energy waste it not. This work is necessary to make the chain secure. In POS, the stakers who owns 10% of the supply will mint 10% of the supply, and won't cost them anything much.
In, POW you have to battle against everything. You have to buy new miners to keep up, pay electricity, cool the machines, buy new ones.
Pos makes it so that 51 attacks are harder bc they are little their investments on the line. Pow is somewhat even harsher. Not only will their rewards lower if 51% attack done, the coin down=machines useless. This is amplified by asic machines which effectively locks the minier rig to mine only that coin.
Pow can be improved even more by making useful mining aka finding primenumbers.
But I am disappointed none of the major crypto use useful mining :(
I hope it will be used one day.
And yes I might of copied and pasted some of my posts to make this comment to lazy to type it out :)
I think you are spot on. Over time the confusion diminishes and the greed chains tend to fade. Bch is almost an afterthought these days. It made a splash for a while but I dont see much out there written about it.
Perhaps this blockchain would benefit from some of the lost of validity of the PoW.
ASIC is Application-specific integrated circuit, right? As in, circuits that are made especially to mine? I think I understand why that makes sense in context.
And thank you for teaching me something that I hadn't considered. Here's hoping that Steemit's proof of brain catches on before everyone loses interest in finding better solutions.
well said. it will be interesting to see where human greed takes us. hopefully greed doesn't win. this infant tech could be the one chance to make things right. in my life time.
What do you think will replace PoW? I love this discussion. I'm very interested in "mining" without machines, but it feels like there's no real clear direction that the future will lead us in (or I just have no clue what that direction is, which is very possible).
BOINC - do a search about Gridcoin
Proof of Burn - so a search about Slimcoin
DPoS, with more tweaks.
Ooo, okay will do. I have heard of coin burning, but didn't see that as a strong alternative. I'll check these out.
PoW was a fantastic way to start. I believe the market will slowly shift to better technologies as it matures.
I look forward to the day when I can understand what you just said @dragosroua but I get that this isn't a good thing so I'm wondering could this hardforking happen on the Steem blockchain too? I know hardforks are part of the plan but, presumably, this you describe is something different. 😁
I think example of steem hardfork is golos.io
good example, although it's not really a hardfork, but merely a separate implementation of the same source code.
I see, thanks for the enlightenment.
Nope, STEEM is different. It hardforked 19 times without a sidechain so far (meaning without creating 2 coins, like the examples above). But, in theory, even STEEM can hardfork in such a way that there will be 2 or more tokens created.
So if Steem did hardfork in that way, and create a 2nd token who would decide that @dragosroua? 😊
Witnesses.
Without greed, we would have gone far. The system is always the problem, but people that run the system is. Some cabals always want to game the system, cart away commonwealth so others would look stupid.
Decentralisation tends to create an egalitarian society, which in fact, is utopian.
so that monero thing is actually happening i thought it was some sort of rumours