The team behind the decentralized cloud storage solution, Siacoin, has decided to engage fully in their blockchain to make ASIC-based extraction ineffective on their network. In a blog post at the beginning of this month, co-founder of Siacoin and main developer, David Vorick announced the move:
"After many discussions with the community and an in-depth analysis of the economic aspects of ASIC production, the core team Sia decided to restore both the Bitmain and Innosilicon hardware proof of work function."
Vorick articulates the economy of the development of ASIC chips for the cryptocurrency / blockchain mining industry for a long time. He states that it costs $ 6- $ 8 million to develop a miner. A new product obsolete all the existing hardware and, at that point, that producer assumes a dominant position in the mining of that specific blockchain.
In addition to selling its miner to a fairly large margin, Innosilicon extracts the blockchain Siacoin itself – taking a dominant position with a percentage of 37.5% of Hahrate Sia.
Bitmain is also influenced by the move. They launched Antminer A3 in January for the purpose of extracting the Siacoin network. This event was very controversial in the Siacoin community since Bitmain kept its project under control and only announced the release of the hardware ten days before launch.
It gave rise to a debate at that time that eventually concluded with the main team that decides not to forge the network to make the Antminer A3 obsolete. They were worried because the feeling was that Bitmain had a track record in subverting the development of the Bitcoin project because of its dominant position. However, the team also said it would be premature to move against them since Bitmain had not actually attacked the network.
In response to The Bitcoin Mag, a representative of Sia said:
"We consider Bitmain and Innosilicon as bad actors who are actively damaging the network." Bitmain has spread Siacoin secret for months, and Innosilicon has extracted nearly 50% of Siacoin's hascoin in a single address on the day of the announcement of our fork. . "
Interestingly, in this case Siacoin is not making all ASIC miners redundant in terms of the ability to extract the blockchain. Vorick argues that ASIC-based mining is still preferable to a GPU-based mining environment. He cites numerous cases in which other GPU-based mining projects have sold off Attacks of 51% while no ASIC project based on mining has yet suffered this fate.
However, it appears that the Siacoin development team has a conflict of interest. In 2017 Sia announced that a subsidiary of Nebulous – the company behind Sia that is responsible for financing the development of the project – would be created to manufacture the ASIC miners specifically for Sia.
The Obelisk mining equipment manufactured by the branch and everything was fine initially. However, with the entry of Bitmain and Innosilicon into the market, their offer has become unsustainable. As Vorick explained, once a newly designed miner hits the market, previous mining equipment becomes obsolete.
It seems that the main motivation here is not so much to protect the network from the centralization of mining, but rather to protect the investment that has been made in the Obelisk. This triggered mixed reactions in the community with a cryptic commentator who urged the Siacoin development team on their motivations:
The centralization of the crypto extraction was a point of contention and discussion in progress within the general community. Those who ignore cryptographic technology and blockchain have argued that this means that any statement about the decentralized nature of blockchain is a mistake. The famous economist Nouriel Roubini recently spoke to this. In fighting the problem, Monero cryptocurrency has applied a updating to their network at the start of this week to make ASIC redundant mining on the network.
Hard hatches in the blockchain sector can be controversial at best. This is not different. The imminent change of the algorithm has led to two forks far from the net – Both Classic and Sia Prime. The hyperspace came back in July due to a number of disagreements in terms of development philosophy. Everything will continue to use the blake2b mining algorithm. Hyperspace took on Twitter to respond to the discussion on the important Siacoin diaphragm:
Following a request for comment by The Bitcoin Mag, Mark Huetsch, Project Lead with Hyperspace said:
"We stay on the old algorithm because we believe that faster hashing speeds are better, and companies like Bitmain and Innosilicon spend a lot of time, money and energy development machines that help make our network safer, of course we welcome them. "
Officially launched in 2015, Siacoin is a cloud storage network that uses blockchain technology to provide a decentralized network that has underutilized hard disk capacity between its hosts. The blockchain allows this marketplace to function without an intermediary. Archiving transactions are protected by smart contracts.
The general proposition is to provide decentralized storage for mainstream users without any inconvenience in terms of price or performance. The long-term goal of the project is to become the Internet backbone storage level. Compete in this space with Filecoin and Storj blockchain-based archiving projects.
* This article was published shortly after the publication to include Siacoin comments
** Updated further on October 21 to include comments by Mark Huetsch of Hyperspace.