Why Ethereum need to be ASIC resistant and adopt ProgPOW(or a different algo with a similar end goal)
Ok, disclaimer first: i am an hobbyist GPU miner and i do it mainly to support the network(currently mining at a loss) but i can't say that i am entirely unbiased.This post is meant to be a collection of thoughts and opinions on why ETH needs to be ASIC resistant and why the adoption of a ProgPOW(or a similar algo if a technically superior alternative is proposed in the near future) is very desirable to keep the network secure and decentralized.
- GPU manufacturers are publicly traded companies listed on major US stock exchanges and they have to abide to a much stricter code of conduct and regulatory requirements than Chinese HW manufacturers.They have to disclose a substantial amount of financial data and while they may not provide a granular break down of revenue streams,SKUs sold etc,especially related to products used to mine cryptocurrencies it's a level of transparency much higher.
- While GPU manufacturers do sell reference cards and a few 1st party offerings directly targeting consumers the vast majority of sales are conducted through a wide variety of OEMs, system integrators and well established sales channels.This creates a thriving and diverse ecosystem of hw vendors and reduces the chances of anti competitive/anti-consumer behavior limiting the opportunity for cartel like structures to form since there a lot of entities competing in the space.3)the % of total revenues represented by cryptocurrency mining related sales is not insignificant for AMD and Nvidia but still a lot less than for ASICS manufacturers since it's quite literally their only Raison d'être . ASICS manufacturers have every incentive to guarantee their continued existence .
- Significantly reduced barrier to entry.It's much easier for a newcomer intent on mining to support the network to get up and running quickly and without much prior research just by hopping to the local PC equipment brick &mortar store down the street and buy a GPU of his choice.This is not the case with ASICS are there could be significant logistic obstancles in obtaining a unit,shipping from SEA,Customs,long lead times,MOQs etc.This means a more distributed mining ecosystem.
- There is some anecdotal evidence that incumbent Chinese ASIC manufacturers do engage in anti competitive behavior to prevent new entities from entering the market either by applying pressure on foundries or just by leveraging their massive first mover advantage,CAPEX and well established economies of scale.
- Security. having a fragmented and diverse HW ecosystem is very desirable when providing security for a blockchain network imho. With GPU mining there are a myriad of possible hw configurations and there is vast choice regarding not only the actual GPUs but all the ancillary components like the motherboards,NICs, OS and mining software.This is in contrast to ASICS which are generally self contained units sharing a lot of components and with a smilar sw stack,generally speaking some flavor of Embedded Linux.In case of a vulnerability being found affecting commonly used mining hw(either introduced intentionally or by chance) an heterogeneous mining infrastructure would be much more resilient since the vuln even if exploited in the wild would only affect a small percentual of the global hashrate.
- Geopolitical risk.A lot of ASICS manufacturers (Bitmain,Linzhi,Innosilicon etc) are,for a series of perfectly reasonable business advantages offered by the country, located in China. Better access to foundries,huge pool of talented silicon engineers,advanced infrastructure to assemble the products,cheap labor etc are attractive for a firm manufacturing mining equipment.Unfortunately this gives a lot of leverage and the ability to the chinese government to exercise undue influence and potentially commandeer a huge swath of the hashpower securing many blockchain including ethereum.Yes i know doing so in an overt manner would have severe consequences,lead to financial losses and ultimately generate a lot of negative political will towards china.The ability for them to overtly or covertly compromise hw,commandeer hashrate or simply instruct companies to artificially limit supply and discriminate towards certain foreign buyers etc is still present and a threat that should not be understated.
- GPUs being general purpose hw is a beneficial property to have in case of a steep decline in price,introduction of more efficient hw etc since network participants who find it no longer profitable to mine are able to resell/repurpose their HW without incurring an unbearable depreciation or total write off of their initial investment.This leads to GPU miners being a lower point of friction and less hostile towards the adoption of PoS which is the ultimate goal for ETH.
People will undoubtedly argue that ultimately ASICS should not be viewed as undesirable since they do provide increased hashpower thus making the network more secure against 51% attacks but i would argue that the distribution of the hashpower ,diversity of the mining ecosystem and the standards to which the companies supplying the hw are called to adhere to are equally important.
I absolutely agree that PoS is the ultimate goal and we should strive to make the transition as smooth as possible and give the researchers and implementers currently working on it a fighting chance while trying to keep the network as decentralized as possible in the meantime.
I view any PoW change just as stopgap solution viable in the short to medium terms( ~ 2 years) until PoS is here.
I do not claim ASICs specifically targeting ProgPOW will never emerge(they probably will) but if they come at the cost of significant capital expenditures,on a much longer timeline and with a reduced power efficiency advantage against GPUs compared to current offerings then the switch will have been worth it and it will have served its purpose.
Criticism, supporting arguments and dissenting opinions welcome.