Ethereum, Monero, Zcash… Who’s Next?

For years, the words “ASIC-resistant” embodied the spirit and pride of the Monero and Zcash communities… until now. In addition to recently undertaking the E3 (Ethash) and X3 (CryptoNight) algorithms, Bitmain has just released the Antminer Z9 Mini, the latest ASIC miner meant for tackling the Equihash algorithm. I will explain why I think that ASICs can harm or even destroy some PoW coins currently being mined with GPUs only.

First and foremost, I would like to make clear that I do not support any illegal usage of any cryptocurrency. Please keep that in mind as you consider my positions on these issues. So, let’s get started.

I won’t put much time into discussing Bitmain’s E3 ASIC, since it has no noticeable price/power efficiency advantages when compared to a homemade GPU mining rig cobbled together by a middle-school student. But, if you are seriously thinking of buying one and you are not a big industrial miner, keep a few things in mind: Bitmain provides only 6 months of warranty on their products and E3 ASICs will become useless and have no liquidity if Ethereum’s network hashrate skyrockets or switches to a Proof-Of-Stake algorithm. Not to mention there is currently no way for the typical user to switch an E3 ASIC to use a mining algorithm other than Ethash.

Antminer X3

Some recent drama has developed around this device and Monero. In March, Bitmain announced a brand new Antminer X3 for mining coins using the CryptoNight algorithm. The price? $12,000 USD… sounds ridiculous, right?
But things got much more interesting when Monero’s devs decided to make a hard fork and switch the coin’s algorithm from CryptoNight to CryptoNightX17 in order to save their coin. This has resulted in the X3 becoming useless not only for mining Monero, but as well as many other coins using the CryptoNight algorithm.

So here is what happened: on the diagram we can clearly see how hashing power generated by ASICs was cut off on the 6th of April. Around 50% in total! Nice :)

Monero Hashrate Historical Chart
Source: https://bitinfocharts.com/comparison/monero-hashrate.html#6m

Of course, for those who spent upwards of $12,000 USD on a device which now costs barely over $2,000 USD, this is clearly bad news. However, for Monero users and the crypto-community as a whole, this event is a great example of responsibility exercised by cryptocurrency developers. They have shown that they really care about their baby. Now, in my opinion, the truth of the words “ASIC-resistant” depends only on the coin’s developers, not on the algorithm itself.

Now it’s time for Zcash. Antminer Z9 mini.

There is no official announcement regarding the hard fork of Zcash from its developers. However, looking at the characteristics of the Z9 mini, with 10,000 kH/s at only 300w of power consumption, it is as powerful as 15 overclocked GTX1080ti cards while operating at much higher levels of efficiency.

What does this mean for Equihash based coins? If Zcash does not create a fork, the difficulty will skyrocket dramatically, making GPUs useless for mining this Equihash based coin.

And that’s not all. Since it became much cheaper to generate new coins, it is possible for the price to decrease proportionally. These events have the potential to deal a heavy blow to the dedicated community who can only wonder why this was found necessary in the first place.

So why are ASICs bad for coins?

Community. Coins like Monero and Zcash are really amazing not only because of their technical advantages (like absolute anonymity), but also because they have a strong community of USERS. The people who actually USE these coins are the ones who give value to them.

I am not talking about traders and large mining companies, since they have not made any meaningful contributions to the crypto-world. They have only made many popular coins unavailable for mining by the general public as well as contributing to the unique brand of crazy crypto-market volatility. I am talking about enthusiasts who are passionate not only about the potential for profit, but as well as the ideology of supporting this new digital economy that has emerged. And with it, the possibility of rewards for anyone who is interested in being a part of it without investing a penny.

Now, when it comes to ASICs… have you ever heard the noise coming from a typical ASIC miner? For those who haven’t, it is around 70 decibels or as loud as a vacuum cleaner or garbage disposal. In other words, they are much louder than a graphics card and not exactly the kind of noise that would make people feel comfortable at home when running 24/7. In the case of the Z9 mini, hopefully it won’t be as noisy since it uses only 300w… not much, compared to the 1300w Antminer S9.

For GPU miners, this means no more Zcash unless you have some spare industrial space and a couple thousand USD.

Thank you for reading, hope you enjoyed!

Author: Electrominer CTO Aziz Aznabakiyev