The sunk cost represented by ASICs act as a natural barrier to defection (exit scams) in Bitcoin.
Exit scams are still possible but because of ASICs, the hurdle you have to clear is much higher.
How Coinbase views proof of work security - https://t.co/rvnL7JwCQshttps://t.co/6rHHw4izFM
Also they totally missed the point, ProgPow chief goal isn't making it impossible to develop ASICS targeting it as much as trying to reduce the vast and ever growing gulf in efficiency between GPUs and asics,lowering the barrier to entry and fostering a diverse(and more secure) mining ecosystem.
> Algorithm changes to “brick ASICs” simply allow the massive general purpose computational resources of the entire world to mine, and potentially disrupt, a cryptocurrency at will. Coins that have implemented “ASIC-resistant” algorithms have been, empirically, very susceptible to 51% attacks for this very reason.
Also, check out some of the replies on the monero subreddit
It won't look as good after reading some of the retorts by the community.
Indeed, a lot of points in here that are similar to ones I've tried to insert into PoW discussions myself over the years.
Mining centralization is not a good thing, but PoW has an inherent centralization bias that is impossible to get rid of and still be PoW. It's tolerable for a while though for the reasons discussed in the article.
The article does not specifically mention ProgPoW, but states:
Algorithm changes to “brick ASICs” simply allow the massive general purpose computational resources of the entire world to mine, and potentially disrupt, a cryptocurrency at will. Coins that have implemented “ASIC-resistant” algorithms have been, empirically, very susceptible to 51% attacks for this very reason.
So I agree with OP, u/sandakersmann that Coinbase is generally against general purpose proof of work.
The title is editorialized, but accurate I'd say... CC u/blockchainunchained
good. we don't need giant mining farms trying to sabotage proof of stake to help their bottom line. in case you don't know what im talking about core scientific (heavy ties with progpow) finally unveiled their new ETH mining facility last week https://cryptobit.media/en/news/mining/2724/ some of us sniffed this out from the beginning and got chastised for being pro-asic
The blog of Coinbase is clearly behind schedule and does not take into account the developments of Monero.
dEBRUYNE_1Platinum | QC: XMR 3699, CC 142, BCH 84 | TraderSu7 months ago
My response to the Monero part of the blog.
I'd like to respond to a few points:
ASIC-resistant algorithms are effective in making it more difficult to build an effective ASIC. The natural result of this is that it takes greater investment and expertise before a chip builder can produce an effective ASIC.
Thus, ASIC-resistance merely raises the barrier to entry into the ASIC market. This results in greater centralization of mining hardware manufacturing — the very situation that the selection of an ASIC-resistant algorithm is meant to avoid!
This only occurs if you allow ASICs on an algorithm that is meant to be ASIC resistant. An algorithm that envisions to be ASIC resistant is naturally sophisticated and complex. As such, there will be plenty of optimizations that can be utilized by ASIC manufacturers, which indeed results in centralization of mining hardware manufacturing. ZEC is a prime example.
If ASICs are going to be allowed on the network, an algorithm is required that is as simple and unsophisticated as possible in order to allow the least amount of optimizations. This ensures an egalitarian playing field for ASIC manufacturers. Monero's 'back-up plan' of switching to SHA-3 (or a similar ASIC friendly algorithm) in case of a RandomX failure is consistent with this notion.
in their strategy
That strategy is basically obsolete since March (when the PoW debate essentially came to a conclusion). The current strategy (i.e. rough consensus within the community) is for RandomX (which is set to go live with the scheduled protocol upgrade of November 30) to be a long-term PoW algorithm (without any tweaks). In case of a failure, a switch to an ASIC friendly algorithm (such as SHA-3) will be made.
Instead, they’ve decided to make tweaks to their proof of work algorithm on a 6 month schedule
To be clear, there won't be six month tweaks of RandomX.
This will force a small, tightly guarded group of Monero developers to attempt a high stakes, highly secretive game of cat and mouse to hide their algorithm plans, with huge financial incentive for any member of this group to violate this circle of trust and leak information to chip builders. The criticality of this group’s decisions and the extreme trust placed in them are not good characteristics for a permissionless world currency, and arguably creates a centralization risk more severe than the risk of miner centralization.
This is a valid criticism of the tweaking strategy, which is indeed inherently centralizing. However, (i) the tweaking strategy is outdated and (ii) RandomX was developed transparently on a public Github repository and subsequently audited by four independent audit teams.
Coins that implement ASIC-resistant mining algorithms, ironically, end up with greater miner centralization and control.
Only valid if the ASIC resistant algorithm does not hold.
participants have to ask themselves if the industry is going to be secured by hobbyists running old laptops in their homes
This statement presents a fundamental misunderstanding of the nature of mining. Mining adheres to a power law, which means that, regardless of the algorithm, a small group of miners will possess the majority of the hashrate (think 80/20 rule). Put differently, large and professional mining farms will exist, regardless of the algorithm. An ASIC-resistant algorithm, however, creates egalitarian mining and thus ensures hobby / small miners can still participate, which contributes to the strength and decentralization of the network.
Frankly, this blog is incredibly frustrating to read. The blog seems to be written eight months in the past without any regard for developments with respect to RandomX and change of strategy for the PoW algorithm.
Lastly, people never seem to mention that ASIC resistance is a mitigation against increased regulation (i.e. by utilizing a general purpose hardware such as a CPU, one can easily obtain some Monero), which is particularly relevant for Monero.
P.S. In case anyone is interested in information related to the PoW debate, see:
EDIT: Upon reflection, the blog provides a valid criticism of the tweaking strategy. I'd like to see it amended though to reflect the change of strategy (i.e. switch to an ASIC friendly algorithm in case of a failure of RandomX) and the creation (and soon introduction) of RandomX.
How much bullshit in a single article, this was the final step for me to close my coinbase account. Spreading such FUD is just not acceptable behaviour for a serious company, especially outdated stuff like they do after RandomX is already out.
With the monopoly which we see in Bitcoin mining hardware a single serious enough bug which would prevent Bitmain's Antminer to mine a block eg. with a higher block height than X would literally halt the whole network since probably like 90% of hashrate would be affected. Even after a fix being released, it would take days to patch all the devices in large mining operations. Impossible to have such a bug? Well, Bitmain already had a killswitch included...
Took you long enough. :)
I stopped using coinbase long ago after realizing listing monero was not happening.
I also urge other Monero advocates to also stop using (supporting) coinbase to purchase btc.
As digital assets mature, participants have to ask themselves if the industry is going to be secured by hobbyists running old laptops in their homes, or if it will become, like nearly every other consequential endeavor in human history, pushed forward at scale by large, self-interested groups of people investing significant resources.
This logic always blows my mind. "See this new thing we made? This cryptocurrency we made to basically re-invent out entire monetary value system and revolutionize the power of money? Yeah, well, thats great. That can be new. But we'll let it just succumb to the forces of centralization and large self interested groups of people investing significant resources because it obviously worked so well that we needed to REINVENT MONEY!!!"
its because the large, self interested groups of people investing significant resources ALWAYS, without fail, will find ways to restrict access to the thing they are investing in, because that way they make more money. Thus, permissionless access is KEY. FUNDAMENTAL to anything that requires decentralization to have any value.
this blog post is disappointing. But then again, ethereum is still a thing and so is tezos or whatever the hell the one is with block producers.
Someone else made an article previously with the same image with hardware-specific and general-purpose coins. Can someone find it? I think it was written by the personal account of someone at Coinbase.
I love how the article completely overlooks reality of centralized hardware manufacturing. It's unlike Coinbase to publish this. They defend all sorts of "alternative" crap with Earn and then put out this nonsense.
> Claim one: It is a security feature for a particular coin’s mining operations to be the dominant application of the hardware used to mine that coin.
Hardware that can be regulated, banned from import by governments, monopolized by Bitmain which also requires KYC to buy it? Very funny. Is it a security feature that China government can just seize ASICs on their territory and 51% Bitcoin for breakfast?
> Claim two: Manufacturing and ownership diversity will be improved with ASIC-friendly algorithms.
Of course, this is exactly what we see in Bitcoin (no).
Agree with coinbase, looking forward to Aeon with its sound ASIC friendly PoW. Verification performance also matters, the randomX is also slow af relatively to ASIC friendly algos. It means that pools must spend a lot of money on verification and bump share difficulty. Monero algos was always a disaster.
That dumb chase of "decentralization" is a least problem of monero which must focus on getting listed on major exchanges like coinbase. The regulatory is the biggest risk of XMR existence and fucking with PoW is just a wrong direction.
>It must be orders of magnitude faster,
Says who? What research demonstrates this?
All it needed was to be at least as fast as CryptoNight, for the network to continue operating without disruption. It has exceeded its requirements, by all measures.
I missed out new incoming block verification time, my bad. Looks like it's 10x faster to validate randomx share than CN share. This is reasonable. And 1m blocks verification being equal to CN verification it seems just a delay for alost 500 initializations. Previously I was looking only at this table and didn't knew reinit takes few seconds.
\> What research demonstrates this?
There is no research on this topic, just an experience with mining that shit years ago. Looks like it's a british thing to research flies and rissoles.