Thursday, May 23, 2019

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Is Ethereum Forking Itself Away From Bitmain?

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The Ethereum developers and the community in general, is facing a tremendous dilemma. The situation developed earlier this week when strong rumors of an ASIC Ethereum miner being launched by Bitmain surfaced on the web. We also reported it here. It started as a rumor on little pages and forums but has grown since then to be considered a proven fact. The miner, being launched by Bitmain in the near future, according to the specs rumored it will have, could mop the floor with any rig using GPUs at the moment.

This fact has caused quite a stir in the Ethereum community, and even devs have made polls on Twitter to eye the answer to a possible PoW algorithm change (Proof of Work). Vlad Zamfir, an Ethereum developer did it and the poll threw an interesting result: more than the half of the poll participants were in support of a fork to avoid centralization from Bitmain.

But it is not that easy. In the Reddit community, there is no consensus about it. Some users think that ASICS is the natural evolution of mining and they just have to adapt; like this user. But this would also have dire consequences for hobbyists and small miners. With ASICs in full force, the difficulty of mining will increase exponentially and revenue for small operations will diminish gradually.

The truth is that, even if there is consensus for changing the algorithm, the damage has been already done. Bitmain is known for mining with their experimental rigs before launching them into the market, so it would not be uncommon for them to have already a large stash of Ethereum already mined. This, in conjunction with the market slump, could have been bringing the price down.

There is another take on this already messy situation. GPU makers have faced an increased demand for units from the mining community. The introduction of ASICS in the market will likely bring this demand to zero; miners will be attracted to most efficient and powerful ASICS to mine Ethereum faster. Today, Nvidia’s CEO Jensen Huang declared that cryptos were not their core business, to distance the company state from a probable cryptomarket crash.

In conclusion, we don’t know if Ethereum will fork to avoid Bitmain’s centralization. But what’s certain, is that in any case, there will be repercussions all across the market whether it happens or not.


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