The founder of Bitmain, Jihan Wu, believes that cryptocurrency mining on ASIC devices increasesleveldecentralization of blockchains. Wu does not agree that ASICs pose a security risk to the Ethereum network (ETH) and other virtual currencies.
ASIC-resistant algorithms will not increase the level of decentralization of blockchains
During a speech at the blockchain conference inJihan Wu, the Chinese city of Chongqing, said that mining on video cards leads to more centralization of blockchains than mining cryptocurrencies on ASIC miners. Wu expressed doubt about the need for the ProgPow ASIC-resistant algorithm on the Ethereum network. In his opinion, the fight against ASIC will not bring the desired result.
Cihan Wu reported the following:
"ASIC-resistant algorithms have been implemented in several decentralized networks, for example, Cuckoo and ProgPow.However, miners continued to mine digital assets on ASICs despite declining profits."
Wu noted that the Ethereum blockchain is nowIt has a high degree of centralization: the two largest mining pools SparkPool and Ethermine account for more than half the network hashrate. Wu believes that using the ProgPow algorithm will not only not increase the level of decentralization, but, on the contrary, will reduce this indicator, because miners that mine ETH coins on the ASIC will be eliminated from the market.
Protocolproof–of–stakewill make a blockchainEthereummore centralized
Jihan Wu also expressed his opinion about the transitionEthereum network with the “proof of work” (proof-of-work) to the algorithm “proof of stake” (proof-of-stake), which implies the need to store the ETH cryptocurrency by network nodes. Wu is confident that the implementation of proof-of-stake will increase the centralization of the blockchain, since the largest reserves of ETH coins will be stored by a few “whales”, which will control a large amount of the network’s computing power.
ASIC miners protect cryptocurrency networks from 51% of attacks
Bitmain founder believes miningvirtual currencies on ASIC devices increases network security from 51% attacks. Unlike GPUs, ASICs are designed to extract a digital asset on a specific algorithm, therefore, in order to carry out a 51% attack on a blockchain, an attacker must have access to a large number of ASIC miners with an algorithm suitable for the blockchain to be attacked. This point of view is confirmed in practice: the vast majority of 51% of attacks are aimed at cryptocurrency networks that mine on video cards.
Bitmain is not profitable implementation of ASIC-resistantprotocols, because this company is the main manufacturer of ASIC. Therefore, Wu cannot assess the situation with an open mind. But it cannot be denied that there is some truth in his words. Cryptocurrencies and blockchains were created free, so any restrictions contradict the original idea. In our opinion, developers should direct their efforts in a different direction, for example, create new software that will increase the efficiency of mining digital assets on the GPU.