Bitmain is totally busted on its Monero miner scheme

Leo Zhang

By Leo Zhang

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Editor's Note

Earlier this week we covered the release of Bitmain's CryptoNight ASIC machines. CryptoNight is the memory-hard algorithm used by Monero and several other networks. The Monero community has expressed antipathy towards ASIC machines, because they are perceieved to enable the centralization of hashpower in what should be decentralized networks.

In February, Monero core developers announced that the network will be switching to a different mining algorithm in a few months. This means by the time the machines are shipped, they may not work on the "main" Monero chain.

Since this paradox started getting attention on Wednesday, March 14, Bitmain has reduced the X3 price from $12,000 to $3,000, making it look as if it had been caught red-handed.

Despite this sort of nonsense, the company is arguably an industry flagship, with a predominant role in the Bitcoin mining community, and its own multi-billion-dollar fork, Bitcoin Cash.

X3 now at 3K$ === SCAM from r/Monero

Some members speculated that Bitmain has started producing Monero ASIC miners a long time ago.

If confirmed, it could explain the rapid hike in hashrate in the past few months.

Monero network hashrate just hit 1GH/s! from r/Monero

This week's news recap

Monday: What does it take to get listed on a crypto exchange? $1 million USD
Tuesday: Winklevii propose a self-regulatory organization for cryptocurrency
Wednesday: Bitmain releases Monero ASIC miners, but they may not work
Thursday: Lightning network is live on Bitcoin mainnet
Friday: Decred's project lead explains how to extend public blockchains (the right way)

Further reading this week

Joint Economic Report from Congress (pp. 202 - 226)

"Blockchain technology could compete with existing mechanisms,goods, and services. Its initial application as a payment medium prompted questions about whether it might replace national currencies and challenge the U.S. dollar."

What’s new with BlockSci, Princeton’s blockchain analysis tool
(Arvind Narayanan)

"Today we’re happy to announce BlockSci 0.4.5, which has a large number of feature enhancements and bug fixes. As just one example, Bitcoin’s SegWit update introduces the concept of addresses that have different representations but are equivalent; tools such as blockchain.info are confused by this and return incorrect (or at least unexpected) values for the balance held by such addresses."

Why preventing a cryptocurrency exchange heist isn't good enough
(Patrick McCorry, Malte Moser and Syed Taha Ali)

"While this approach may be sufficient for conventional financial systems (where a centralized authority can – within certain limits – reverse transactions), it is clearly inadequate for the cryptocurrencies paradigm where damage can be done immediately and irreversibly. Instead, exchanges need to incorporate reactive mechanisms into their defense strategies that anticipate failure and allow them to recover after a successful attack."

This year’s SXSW was all about blockchain dreamers, cryptocurrency scammers, and everything in between
(The Verge, by Nick Statt)

"Though regulation is top of mind for everyone in the community, the dreams of a decentralized future remain largely unwavering and rather grandiose."

Is NEO the Chinese Ethereum? A view from within China
(Daily FinTech, by Zarcgin)

"Besides, the goal of Antshare is to provide a smart platform for digitalized assets while Ethereum is a platform for decentralized applications. Assets versus applications is also a key difference between the two. Those reasons provide a 'no' to the question in the headline."

Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach
(The Guardian, by Carole Cadwalladr and Emma Graham-Harrison)

"Christopher Wylie, who worked with an academic at Cambridge University to obtain the data, told the Observer: 'We exploited Facebook to harvest millions of people’s profiles. And built models to exploit what we knew about them and target their inner demons. That was the basis that the entire company was built on.'"

National debt hits $21 trillion
(Washington Examiner, by Pete Kasperowicz)

"Under the law passed in February, the government will not face any borrowing limit until March 1, 2019. At its current pace, the government is on track to add at least $1 trillion to the national debt by then."