Blockchain Semantics Insights
Business Case | Deep Tech | Announcements | Blockchain Glossary |
ASIC ResistanceBy Nishant Kumar | April 13, 2018, 2:24 p.m. GMT
Monero seems to have gone through a hard fork again. That adds up to a total of 4 separate fork chains of Monero already, namely Monero Classic (XMC), Monero 0 (XMZ), Monero Original (XMO) and a second project by the name Monero Classic. The latest hard fork has introduced a tweak to Monero’s CryptoNight proof of work hashing algorithm. This hard fork renders all existing ASIC mining hardware useless.
So what are ASICs?
An application-specific integrated circuit is a kind of integrated circuit intended to solve a particular use case rather than general problem use cases. For example, when the proof of work was proposed for Bitcoin mining, more stress was given on the fact that consensus will be based on nodes competing with each other to solve a complex mathematical problem, which would require high hashing power. With the growing popularity of Bitcoin miners, a lot of specialized ASIC rigs are being manufactured to gain an edge in the mining race. While this seems to make it easier for the network to get faster transactions due to specialized ASIC hardware, it also takes out the primary essence of decentralization.
ASIC compliant networks like traditional Bitcoin have this issue which means that GPU miners would be no competition to ASIC mining rigs, which can control the entire network due to their superior hash rates. Learning from these loopholes, nowadays several blockchain networks try to make ASIC resistant cryptocurrencies.
What is ASIC resistance?
ASIC resistance means that the network values ASIC mining and GPU mining equally. Err, not exactly equally, but ASIC mining rigs lose out on their exclusivity. This means that mining rigs don’t take away all the rewards and small players can also contribute to the network, increasing the level of decentralization.
So how does it happen?
In traditional mining, the algorithm is to focus on the calculation of hashes. ASIC hash engines are specifically optimized for computing SHA-256 hashes and offer incredible speed and energy efficiency that CPUs cannot hope to match. A state-of-the-art ASIC Bitcoin miner computes 13 trillion hashes at about 0.1 nano-joules energy cost per hash. This is roughly 200,000× faster and 40,000× more energy efficient than a state-of-the-art multi-core CPU.
The two fundamental advantages of ASICs over traditional GPUs are their smaller area and better energy efficiency when speed is normalized.
The speed advantage can be considered as a derived effect of the area and energy advantage. A chip’s area is approximately proportional to its manufacturing cost. From an economic view, this means that keeping speed constant, an ASIC can lower its capital cost due to area savings (smaller chips bear smaller cost) and its recurring electricity cost due to energy savings, compared to a CPU user.
To achieve ASIC resistance is essentially to reduce ASICs’ area and energy efficiency advantages.
One possible way can be using hashing functions that require a lot of memory capacity to evaluate. More memory usage means more area is required. So an efficient miner needs to have sufficient area to store values in its memory. If a hashing algorithm is more memory intensive rather than the earlier CPU intensive, we can eliminate the reasons which add to ASIC gaining any relevance.
No one knows whether true ASIC resistance is achievable or not. What Blockchain networks can do is to make sure that it minimizes the number of loopholes when it comes to achieving decentralization, one way or the other.