Ethereum Mining is About to Change Forever

Ethereum Mining is About to Change Forever

Apr 4, 2018

For better or worse, Ethereum mining is about to change forever.

On Tuesday, China-based mining hardware manufacturer Bitmain began accepting preorders for the Antminer E3, the first Application Specific Integrated Circuit (ASIC) miner built for Ethash, the Proof-of-Work (PoW) consensus algorithm used to mine Ethereum and other similar cryptocurrencies.

Rumors had been circulating for months that Bitmain had developed and was secretly already using an Ethash ASIC miner, but they had not been confirmed — until now.

Previously, Ethereum had been mined primarily with devices that used GPU chips, which are general-purpose and available at any electronics retailer. Thinking this to be the best way to ensure Ethereum’s hashrate remained decentralized and not in the hands of a small group of manufacturers, the cryptocurrency’s developers purposely made Ethash resistant to ASIC development.

ASICs are vastly more efficient than GPUs, so the release of the Antminer E3 will force miners to adopt the new technology to remain competitive. This will quickly change the face of Ethereum mining, and — almost overnight — give Bitmain a significant if not dominant role in the industry.

However, there is strong support among many Ethereum users to adopt a network upgrade that renders these miners obsolete and prevents the hashrate from becoming too centralized.

A proposal to this effect from Ethereum developer Pier Merriam currently has 96 percent support among voters, though — importantly — it is general in nature and does not advocate for specific measures beyond maintaining ASIC resistance.

Such a move would not be unprecedented. Privacy-centric cryptocurrency Monero has already taken steps to alter its consensus algorithm in retaliation to Bitmain’s recent announcement that it had developed an ASIC compatible with the network’s Cryptonight consensus algorithm.

The coin’s developers have further stated that they will preemptively alter their algorithm semi-annually to discourage manufacturers from attempting to make new Monero ASICs in the future.

Strategic Coin is a leading research and advisory firm for companies planning to integrate blockchain capabilities into their business model via utility token launches. Our customer research reports provide qualitative and quantitative analysis of token use cases and platform value. With the Strategic Coin Advantage network of partners, we offer customized services for the pre-launch, full-launch, and post-launch phases of Token Generation Events (TGEs).

Featured Image from Pixabay