Today, Monero, the privacy-oriented cryptocurrency completed a hard fork. This with the main objective of avoiding centralization of the hash rate by Bitmain, the hardware mining giant. Bitmain, announced recently the launch of specially designed ASICs (Application Specific Integrated Circuit) to implement the Cryptonight algorithm, used to mine Monero.
Monero, and the Cryptonight algorithm were regarded as ASIC resistant, and was mined mostly by small miners using their GPUs. But months before the announcement some miners detected an enormous amount of hash rate in their pools, and started suspecting of the existence of ASIC prototypes. And they were right. Bitmain launched the Bitmain X3, a miner rig capable of hash rates of 220 KH/s, leaving behind GPU rigs by a large margin. We reported that launch here. Bitmain is known for mining covertly with their ASICs before launching them, assuring some profit for itself, besides the profit of selling their hardware already used.
Today, after the hard fork, users in Reddit have detected an early very significant drop in the total hash rate of the network. Of course, it is still early and most miners have not updated their software yet, but, if those results are true, the Monero blockchain was being almost entirely mined by undercover ASICs. The calculations are being made in this thread.
The Fork Dilemma: Monero and Ethereum “Classic”
Now, Ethereum devs and the general community are facing the same dilemma. Bitmain has also revealed that they will launch an Ethas ASIC miner, the Antminer E3, that also has an impressive hashrate and is more efficient, simple and cheap than its GPU counterparts. The problem with a fork is that it creates two new coins, and if the community is split between the two, it could very well debilitate the stance of the cryptocurrency in the market. The great ASIC miners won’t leave that their investments be lost due to community backlash.
And that is whats happening right now. A post on the bitcointalk forums has referred to the old Monero as “Monero Classic” and it claims that the providers of roughly the 80% of the actual hash rate are against the algorithm change. It looks like a legit group, but it is yet to be seen if their claims are accurate. Will Ethereum risk fragmentation with a unilateral fork, not being accepted by all its community? It remains to be seen.