ASIC Miners to Fork if Ethereum ProgPow Goes Ahead?

With funding recently secured to audit the proposed code changes in ProgPoW, we could see an Ethereum network with a drastically different environment for ASIC and GPU miners.

Key Takeaways:

  • 50,000 DAI raised via an open-source bounty platform to audit proposed ProgPoW code
  • ProgPoW developer claims if the code is implemented, the efficiency gains available to ASIC miners will decrease from 2x to ~1.1x
  • Given the contentiousness of the proposed changes, a chain split seems likely if the code changes go ahead

A highly controversial proposed upgrade to the Ethereum protocol has received funding to be audited by a third-party. The upgrade known as progressive proof-of-work (ProgPoW) would have enormous implications for miners if implemented.

Funding for the audit was raised on the open-source bounty platform Gitcoin with 50,000 being raised in the DAI stablecoin which aims to remain pegged to the USD. The audit will be conducted by Least Authority, a Berlin-based computer security firm.

ASICs versus GPUs

The upgrade proposes to make changes to Ethereum’s mining algorithm, Ethash. It would change the algorithm to one which dynamically adjusts every 12.5 minutes. What the upgrade is really designed to do is to close the efficiency gains available to miners when they use ASICs.

The algorithm aims to make the efficiency gains that ASIC miners achieve over GPU’s 1.1x to 1.2x – much less than the 2x gains that ASIC miners benefit from with the current Ethash algorithm. Pseudonymous developer ifdefelse (@IfDefElse_) notes that efficiency gains can mean increases in “absolute performance, performance per watt, or performance per dollar” as they are all highly correlated.

If the proposed code changes are to go ahead, it will likely decrease the number of ASICs mining on the Ethereum network. Advocates for the code change argue that ASICs are one of the biggest threats posed to the decentralization of the Ethereum network.

ASICs are a relatively new phenomenon to the Ethereum network. Bitmain, the largest supplier of ASIC hardware shipped its first batch of ASICs designed for the Ethereum network in July of 2018.

Regardless, ASICs developed for Ethereum only represent a fraction of the product offerings of ASIC hardware suppliers so the impact on the business models of ASIC suppliers is likely to be insignificant. However, GPU suppliers such as Nvidia and AMD may see a rebound in sales after a sluggish end to 2018.

It is uncertain what share ASIC mining represents of the current mining taking place on the Ethereum network but the proposed ProgPoW upgrade would likely make it even smaller. This combined with the planned eventual transition to proof-of-stake on the Ethereum network makes the long-term profitability of mining on the Ethereum network highly questionable.

There is also another factor to consider. How effective are code changes at halting ASICs?

Chain Split

Monero is the only major cryptocurrency which regularly forks its network to maintain ASIC resistance. However, even the lead developer of Monero has noted that this is only a temporary measure.

“All that’s happening is Monero is stalling ASICs, not preventing them. Hopefully it’s stalled until ASICs are commoditised!”

Riccardo Spagni, Monero lead developer

The regular upgrades of Monero have already resulted in two forked chains, Monero classic and Monero 0. These networks have little development taking place on them but the attempts to remain ASIC resistant through the upgrades have proved to be somewhat futile. Evidence prior to the 2019 March hard fork of the Monero network estimates as much as 85% of the network was being mined by ASICs.

The most recent hard fork of the Monero network which took place in March has led to a drop in hash rate and an increase in profitability for those GPU and CPU miners. But the past indicates that manufacturers are very fast at adapting to the new algorithm.

In the case of ProgPoW, it is even noted by ifdefelse that a “custom ASIC to implement this algorithm is still possible”. However, the algorithm altering every 12.5 minutes may make the efficiency gains achieved by ASICs far smaller.

“I do believe it will cause a coin split… the ASICs that mine on their own network and the GPU users will continue to mine on this [current] chain.”

Kristy-Leigh Minehan, ProgPoW developer

Upgrades are contentious in cryptocurrency networks. One as contentious as ProgPow will almost certainly result in chain split.

It has been reported that ASIC miners are strongly against the implementation. Minehan, the main advocate for ProgPoW, envisions a split happening with the main Ethereum chain implementing ProgPoW with a significant number of ASICs forking to their own network.

A key tradeoff is made when upgrading a protocol to maintain ASIC resistance. On the one hand, it lowers the hash power securing the network. On the other hand, it helps prevent centralization of mining power.

As it stands, ProgPoW remains at the audit stage. But if it passes this stage, the debate regarding ASICs versus GPUs will likely heat up.