How Far Will Crypto's War On Miners Go?

Can public cryptocurrencies stay public?

That's the simple question that lies at the heart of a complex debate happening across major cryptocurrencies, where developers from projects as diverse as ethereum, monero and zcash are up in arms over what to do about the arrival of a new form of hardware that could upend the delicate balance of their distributed communities.

Designed specifically to enable operators to earn a greater share of their networks' rewards, "application specific integrated circuits,” or ASICs, have emerged to mine a handful of cryptocurrencies that were previously only able to be secured by those using GPU hardware.

At stake, however, is the very access and openness of the protocols themselves.

Stepping back, it's important to unpack just what occurs during the "mining process," a somewhat complex phrase that denotes the practice by which anyone can theoretically devote spare computer hardware toward running and securing blockchain networks.

Ethereum, monero and zcash can all be mined today with GPU hardware, graphics cards sold at major computing stores and that are available for only a few hundred dollars. More expensive ASICs, however, are specifically designed for an optimized mining process, and that's at the heart of some of the complaints against the arrival of this new slew of products.

That's because, as bitcoin has proven in the past, GPUs won't be able to co-exist with ASICs, as their arrival is likely to push the hashrate to a level where other types of miners will become unprofitable.

And the threat and opportunity that lies ahead is now splitting cryptocurrency users, many of whom may have invested previously in products that are now effectively obsolete.

A miner going by the handle "fpbitmine," for example, went so far as to accuse zcash creator Zooko Wilcox of not doing enough to support those who have invested in helping the network gain value.

“You are biting the hand that feeds you,” the miner wrote on a zcash forum, adding:

As such, many miners are threatening to take their hardware elsewhere or else create alternate versions of the cryptocurrencies they're already mining, something they can freely do by cloning the codebase.

Last week, privacy-centric cryptocurrency monero executed a hard fork, a system-wide software upgrade, to remove the ability for ASICs to be used on the network. But in turn, three groups hard forked to create their own versions – monero classic, monero original and monero zero. (Each new software is compatible with and open to ASIC miners.)

The divergent ideas about whether ASICs are beneficial for, or a threat to, monero mirror the opinions of other cryptocurrency communities as well.

For instance, ethereum developers have spoken out against an emergency hard fork in response to ASICs, with its creator Vitalik Buterin even calling for a “no action” on the issue. Still, in response, one ethereum miner called Buterin's standpoint a “slap in the face."

He wrote:

Echoing that sentiment, the vertcoin Twitter handle tweeted how it believes action is needed.

"We are sad to see news of possible ASICs being created for ethereum. We believe that it is time to take a stand against monopolised mining," it said.

And the same head-butting is happening in the zcash community.

While a zcash miner warned on a forum that “there are consequences” for a crypto that fails to keep out ASICs, zcash founder Zooko Wilcox told CoinDesk that he believes forking away from ASICs “could even do more harm than good.”

Adding to that, IC3 researcher Phil Daian has said that anti-ASIC efforts are akin to censorship, and others have argued that such efforts increase the power of the core developer team.

But all these complaints to the anti-ASIC sentiment seem to be on the minority side of the debate.

As a way to measure sentiment, several twitter polls were conducted [1, 2, 3] that show a majority leaning toward anti-ASIC hard forks, a procedure that would require editing a crypto's underlying algorithm.

Yet, those on the other side of the debate aren't particularly fired up; instead, their comments feel like a kind of "good riddance."

For instance, speaking to CoinDesk, Rob Stumpf, the moderator of EtherMining, the ethereum mining subreddit, said, "If a developer believes that he or she can improve upon [ethereum] and wishes to start their own fork, they can do just that.”

And monero core developer “rehrar” said during a recent call that there were “no hard feelings” toward divergent monero groups.

“It’s a mental shift for people, that they’re not used to yet, that the power is in their hands to have the discussions that they want to have,” rehrar said.

One discussion that this chaos has brought back to the forefront is ethereum's interest in scrapping mining by moving from proof-of-work to proof-of-stake. Buterin told developers at a recent meeting that ASICs would be flushed out with the upgrade so there isn't much to worry about (although there still isn't a date nailed down for that change).

Speaking to ethereum developer's interest in eliminating mining, Stumpf said, “Mining was always doomed from the start; it is just a ticking difficulty bomb waiting to explode."

And Wilcox echoed this, telling CoinDesk:

Pseudonymous Monero Research Lab developer Sarang Noether even seemed to think the dip by between 70 percent and 80 percent in hash rate that occurred after the hard fork, was proof that ASICs were secretly being used on the network. And then they were gone.

Monero developer “hyc” told CoinDesk:

Cracks in screen image via Shutterstock