This morning, the Monero network hard-forked to cut off ASIC machines that were secretly built for its network. Its lead developer celebrated with the tweet below, quoted in our headline.
Technical & Updates
Monero did the thing with the thing. pic.twitter.com/EEwjfZxY0R— Riccardo Spagni (@fluffypony) April 6, 2018
Much of today's buzz in cryptocurrency world is around Monero's scheduled hard fork. As a result, hashrate on the network dropped significantly.
Riccardo's speculation on the source of the drop:
I suspect like 70% ASICs, 20% people who haven’t upgraded, 10% botnets— Riccardo Spagni (@fluffypony) April 6, 2018
This hard fork resulted in several new networks:
"A bigger problem is that moving coins on both blockchains reveals which coins are controlled by the same user. This is at odds with Monero’s central value proposition of privacy and fungibility. Therefore, anyone who uses Monero for privacy reasons is best advised to completely choose one chain and ignore the other completely. (It’s presumably best to ignore the chain that carries the least value.)"
"If Monero is able to successfully complete this hard fork and the original chain which contained the CryptoNight algorithm that was ASIC-exploitable ‘disappears’, then Bitmain will be left with millions of dollars worth of useless equipment. Not only that, but whatever profits that they were making from the chain will be absolved as well."
Evidence of the hypothesis in the article is reiterated in this tweet:
ASICs were announced for Litecoin April of 2017. Yet, only recently were ASICs announced for the other cryptocurrencies here.— grubles (@notgrubles) April 6, 2018
Except...they all seem to share the same massive increase in hash rate.
We now know Bitmain was secretly mining XMR with ASICs.
The charts don't lie. pic.twitter.com/XuFRmDOFpi
Yes - it’s a design flaw in expensive PoW algorithms that lack asymmetry, and one that has been discussed often enough when talking about memory hard algorithms etc. Incidentally, given the cost of these ASICs, they could easily be used by a competing coin with a little funding.— Riccardo Spagni (@fluffypony) April 6, 2018
Ethereum's community is going through a similar situation as Bitmain just announced E3. Vitalik, however, is taking an opposite position:
"Vitalik Buterin is coming out against a proposal that would find the blockchain he created changing its software to limit the performance of mining hardware designed to yield a greater cut of the network's rewards."
For deeper analysis of ASIC-resistance, read Derek's article:
News & Commentary
No market based monetary good can become fully fledged money without becoming a deeply established store of value first. This is why the BCash vision is ultimately doomed to failure: it is based on bad economics and puts the cart before the horse.— Vijay Boyapati (@real_vijay) April 6, 2018
"O’Shaughnessy says it’s a good thing, though. In the past decade, his town of about 13,000 on the St. Lawrence River has lost much of its main industry — as a powertrain plant closed and an aluminum manufacturing plant downsized. But now, one and possibly two bitcoin mining companies are moving in, and they have promised to create dozens of jobs."
"However, when adjusted for age—that is, applying earlier employment rates for different age groups to the current, now older population—the employment rate is essentially back to its pre-recession level."
"Since monetary policy affects the economy with a lag, waiting until inflation and employment hit our goals before reducing policy support could have led to a rise in inflation to unwelcome levels. In such circumstances, monetary policy might need to tighten abruptly, which could disrupt the economy or even trigger a recession."
"While AI can drive economic growth, it may also accelerate the eradication of some occupations, transform the nature of work in other jobs, and exacerbate economic inequality."
A somewhat related note on the state of employment: