Cats, Mice and ASICs

In March 2018, mining manufacturer Bitmain announced that it had developed an ASIC for mining Monero and Bytecoin. Both tokens are derived from the CryptoNote protocol, which was designed to be an ASIC-resistant consensus algorithm. The announcement came only a month after Bitmain launched an ASIC for Siacoin, a move regarded by some as a hostile takeover. Bitmain is also behind Antpool, one of the largest miners in the world. Considering this, critics argue that Bitmain’s rapid development of ASICs, which is reflective of its enormous R&D budget, poses unique centralization risks to the future supply of certain cryptocurrencies. Others say that mining specialization is inevitable and a natural step in a cryptocurrency’s lifecycle. What seems to be different today is the speed at which ASICs are being developed and deployed. Last week, it was rumored that Ethereum was Bitmain’s next target, which caused the price of Ether to crash. On Monday, Bitmain confirmed the release of Antminer E3, the first Ethash ASIC.

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