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Bitmain Eyes 2020 Bitcoin Block Halving as Pivotal Moment for Mining Fortunes

The company thinks an uptick in Bitcoin prices prior to the halving will spur demand for mining hardware.

Embattled cryptocurrency mining giant Bitmain has allegedly hinted the release of its new mining hardware could hinge on the 2020 Bitcoin (BTC) block reward halving. The news was reported by English-language Asia news outlet South China Morning Post (SCMP) on March 27.

Bitmain, which has seen a testing six months as market volatility triggered redundancies and a failed public flotation, reportedly said next year’s event could reverse its fortunes. SCMP cited a “a company source with knowledge of the plan.”

Block reward halvings reduce the amount of BTC awarded to miners who successfully solve the algorithms to validate blocks of transactions.

In May 2020, the reward size will decrease from 12.5 BTC to 6.25 BTC per block. In line with previous events, sources anticipate Bitcoin prices will increase in advance — possibly beginning around June this year.

“Bitmain is now betting that its next flagship product scheduled to be released by the end of this year will turn out to be a winner in the mining gear market, capturing an expected rally,” SCMP wrote, citing the unnamed source close to Bitmain as saying.

Despite its problems, Bitmain continues to release new products, with the T17 and S17, both of which will utilize its latest 7nm chip technology, currently the focus of attention.

Earlier this month, the company released the Z11, a dedicated ASIC miner for Proof-of-Stake cryptocurrencies.

This week, meanwhile, executives claimed its lapsed IPO filing had in fact help deliver more transparency to its public profile.

“We will restart the listing application work at an appropriate time in the future,” a statement from the firm added, as the threat of a lawsuit from disgruntled investors also emerged.

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New Bitmain Z11 Antminer Comes With Pledge to Preserve Values of Zcash

The new product comes as Bitmain continues to fight a market slowdown which has resulted in cost-cutting moves.

Cryptocurrency mining giant Bitmain has released a new version of its Antminer Z series machines for Equihash algorithm coins, the company confirmed in a blog post on March 19.

The Antminer Z11, which comes around ten months after the release of its predecessor the Z9, claims to treble the hashing power available for its target cryptocurrencies.

Equihash is the algorithm used in altcoins such as Zcash (ZEC) and ZenCash (ZEN).

The move sees Bitmain continue to forge ahead with new products despite challenging market conditions within the mining industry, the company previously closing down some aspects of its operations.

“The new Antminer is now pre-selling on Bitmain’s official website and will start shipping shortly,” the blog post confirmed.

In February, Bitmain rolled out its latest offering for SHA256 algorithm cryptocurrencies, such as Bitcoin (BTC) and Bitcoin Cash (BCH).

Similar to that hardware, the Z11 is an ASIC miner, with the Zcash community previously debating over whether to make the coin’s network resistant to ASICs.

Concerns focused on ASICs making the mining landscape less diverse and increasing the possibility of a hostile entity gaining control.

In light of the debate, Bitmain appears to want to offer more transparency to its target market.

“To preserve the Zcash community’s values around security, reliability and accessibility, Bitmain had previously Tweeted real-time updates to ensure more transparency and will continue to provide shipping updates of the first batch of the Antminer Z11,” the blog post said. It continued:

“These commitments to transparency will continue to provide the Zcash foundation and community with the security, reliability and accessibility they desire of manufacturers.”

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Rumor: Jihan Wu and the Jenke Group to Retire as CEOs of Bitmain

With the New Year only hours away, news reaching Ethereum World News indicate that the giant Bitcoin mining and ASIC manufacturing company of Bitmain might be undergoing some radical top management changes. According to reports by both Cointelegraph and Odaily, Jihan Wu and the Jenke Group will soon be retiring as CEOs of the company.

Odaily went to name a single successor with a surname of Wang. The report went on to state that Bitmain is in a transitory period as the changes are implemented.

Earlier Reports of Jihan Wu Losing Executive Power at Bitmain

The unconfirmed reports of major changes at the top leadership at Bitmain come a month after similar rumors surfaced that Bitmain had undergone a massive board reshuffle. In the restructuring, Jihan Wu had lost his seat as the board’s executive director and was now serving as a supervisor. His position at Bitmain had been replaced by Zhan Ketuan.

Possible Shut Down of Mining Operations at the Mining Giant

Odaily went on to add that the firm could also wind down all mining operations carried out by Bitmain. In addition, the firm will sell all its currently operational Antminer S9s. Once again, we would like to remind our readers that this are unconfirmed reports.

Layoffs Already Underway

Only one week ago, Ethereum World News had indicated that Bitmain was laying off up to 50% of its staff as part of streamlining operations due to the cryptocurrency bear market. With a staff count of over 2,000, the Bitmain layoffs might shake the crypto-verse further if they are accompanied by the aforementioned ceasing of mining activities. Such an event would shift the balance of mining operations and open the doors for a reentry of small scale miners into the BTC network.

A Continual Domino Effect

Earlier on in the month, we had analyzed why the Bitmain IPO would probably not be approved by the Hong Kong Stock Exchange (HKEX). A summary as to why the HKEX would be reluctant to list Bitmain is as follows.

  • $740 Million in Q3 losses excluding cost of financing Hash Wars
  • $10 Million in combined costs from both BCH camps for financing the hash wars
  • Bitmain allegedly liquidating its stash of BCH to pay off supplier debts
  • Lawsuit against Bitmain and BCHABC supporters for allegedly hijacking the BCH blockchain
  • Earlier rumors of Jihan Wu losing Executive powers at Bitmain

Conclusion

Summing it up, the rumors indicating that Bitmain might be in financial trouble have continued to pile up from around the third quarter of 2018. What remains, is official confirmation from Bitmain that all is not well at the ASIC (Application Specific Integrated Circuit) chip manufacturer and crypto mining company.

What are your thoughts on the unconfirmed reports that Jihan Wu and the Jenke Group will be resigning as Bitmain’s COEs? Please let us know in the comment section below. 

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

The post Rumor: Jihan Wu and the Jenke Group to Retire as CEOs of Bitmain appeared first on Ethereum World News.

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Unconfirmed: Chinese Media Reports Jihan Wu, Jenke Group to Soon Resign as Bitmain CEOs

The CEOs of leading mining ASIC producer Bitmain will be allegedly soon be retiring to give place to a successor surnamed Wang.

Jihan Wu and the Jenke Group will be reportedly soon retire as CEOs of leading mining ASIC producer Bitmain. Rumors about their departure were reported by Chinese local media Odaily on Dec. 28.

Odaily quotes an unnamed source familiar with the situation that Bitmain is currently in a transition period. Furthermore, the article also reports that employees allegedly weren’t optimistic about the outcomes of the double-CEO system.

The Chinese local outlet also notes that their successor is supposedly surnamed Wang, without providing further information.

In mid-November, Chinese local media reported that Wu would no longer be able to influence corporate decisions at the mining manufacturer, alleging that he had been demoted from the position of director to that of supervisor.

Odaily also reported today that unspecified sources declared that Bitmain is planning to cease all mining operations and already commissioned the relevant dealers to sell the used Antminer S9s. This, according to the article, would mean that the company will lay off over 500 employees.

In mid-May, Wu had told Bloomberg in an interview that the manufacturer was considering turning to artificial intelligence (AI) amid China’s crypto crackdown. At the time, Wu predicted that AI chips could account for around 40 percent of Bitmain’s revenue in the next five years.

The Odaily article referenced the AI division, noting that layoffs would include those from the AI, mining, overseas, and BCH Copernicus client teams.

At the end of December, Chinese social media sources reported that Bitmain had already allegedly fired its entire staff of BCH developers.

Bitmain has not responded to Cointelegraph’s request for comments on the CEO changes or the layoffs by press time.

The downward trend reported by the prices of cryptocurrencies this year also hasn’t spared graphics processing unit (GPU) producer Nvidia. As Cointelegraph reported today, Nvidia is facing a class action lawsuit over the losses reported by the company when lower crypto prices diminished demand for GPUs by miners.

According to the complaint, Nvidia “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary.” This assumption — according to the indictment — is a false and misleading statement.

As Cointelegraph also recently reported, after the decrease in GPU demand by miners, Nvidia was the worst performer in S&P 500, losing 54 percent of its stock price.

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Major Mining Pool F2Pool Publishes List of Minimum Prices for Profitable Crypto Mining

Co-founder of the world’s sixth largest crypto mining pool has published a list of break-even price points for various crypto miner models.

The CEO of China-based crypto mining pool F2Pool posted a company-branded infographic September 6 that indicates at what minimum price points the mining of various cryptocurrencies becomes unprofitable.

Shixing Mao, co-founder and CEO and of the world’s sixth largest mining pool F2Pool, published a list of price levels for major cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Zcash (ZEC) below which mining said currency with various different miners allegedly becomes unprofitable.

According to Mao’s graphic, if Bitcoin’s price hits lower than 36,792 yuan (about $5,376) point, this would mean that mining the cryptocurrency on an Antminer T9 would be unprofitable. In the case of using an S7 model miner, the break-even point amounts to a significantly higher 79,258 yuan (about $11,581) Bitcoin price point.

Break-even price points for different cryptocurrencies and miners

Break-even price points for different cryptocurrencies and miners Source: F2Pool’s CEO Weibo

In contrast to S7, mining Bitcoin on Antminer T9 model that was released in January 2017, is still profit-making at Bitcoin’s currently prices, while the newer Innosilicon T2 has the lowest threshold, amounting to 26,636 yuan or about $3,891.

At press time, Bitcoin is trading at $6,452, according to Cointelegraph’s Bitcoin Price Index

In mid-August, U.S. graphics processing unit (GPU) manufacturer Nvidia revealed that crypto mining hardware sales were much lower than expected in Q2 2018, claiming that the company does not expect to make significant blockchain-related sales for the rest of the year.

In July, major Taiwanese microchips producer TSMC once again decreased its annual revenue and capital expenditure estimates, following growth rate reduction in the crypto mining field, among other areas.

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Bitcoin Mining to Use 0.5% of World’s Energy by End of 2018, Peer-Reviewed Research Shows

Economist Alex de Vries, who published an article on “Bitcoin’s Growing Energy Problem,” yesterday, May 16, in scientific journal Joule, told the Independent that Bitcoin (BTC) mining will use 0.5 percent of the world’s energy by 2018.

De Vries concludes that as the BTC network currently consumes about 2.55 GW of electricity and moves towards consuming 7.67 GW in the future (for reference, Ireland consumes 3.1 GW and Austria 8.2 GW), the network “has a big problem, and it is growing fast.” However, he does note that solutions like the Lightning Network “may alleviate the situation.”

Bitcoin mining requires energy for performing the calculations – hashes – that give miners Bitcoin rewards. In mid-February, it was reported that crypto mining in the country of Iceland would consume more energy than households in 2018. The debate over whether Bitcoin mining is overly harmful for the environment is seen by some as a non-issue, due to the real need for Bitcoin in underbanked countries.

De Vries told the Independent, however, that “half a percent is already quite shocking:”

“It’s an extreme difference compared to the regular financial system, and this increasing electricity demand is definitely not going to help us reach our climate goals.”

The scientific study goes into detail about the different types of Bitcoin miners and their individual energy usage, noting that “trying to measure the electricity consumed by the Bitcoin mining machines producing all those hash calculations remains a challenge to date.” De Vries uses Bitmain’s Antminers as his main example to show how much energy each machine uses in its lifetime.

As De Vries’s study is the first time data on Bitcoin energy consumption has been peer-reviewed, he hopes his paper will “get the conversation started,” as he believes that the world needs “more scientific discussion on where this network is headed” as opposed to “back-of-the-envelope calculations,” he told the Independent.

Conversely, the technology behind Bitcoin, blockchain, is being used to alleviate environmental impact in some cases. This week, IBM announced a partnership with Veridium Labs with the aim of tokenizing carbon credits to allow companies to better track their carbon footprint through blockchain, potentially allowing them to reduce their carbon impact.

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ASIC Resistance: Will Ethereum Join Monero Against the Mining Giant?

The crypto community is bracing for a real revolution – leading cryptocurrencies may abandon the Proof-of-Work (PoW) algorithm. The reason is the far-reaching game of mining giant Bitmain, which is building up its monopoly on the market by stamping out new ASICs for top coins. This concerns not only the users who prefer traditional GPU farms, but also the developers themselves, as the ecosystem becomes increasingly centralized and vulnerable to attacks.

It seems that the line production of short life ASICs for new coins has turned into an arms race between Bitmain and less-rapid rivals. Everyone wants to bite off the last piece from the PoW algorithm, promising a quick payback and leaving no chance to traditional GPU farms. The first Antminers are sold out before the start of sales, and users seem to receive the promised profit. If it were not for one thing – ASICs are quickly becoming unprofitable, and growing hash rates lead to Blockchain centralization.

ASIC resistance

In the community, Bitmain has gained a reputation of a “greedy bunch” after using a huge hashrate on its own pool (Antpool.com) to block important votes in the Bitcoin network. The resistance formation itself began at the start of the year when Bitmain suddenly announced the launch of Antminer A3 production for SiaCoin mining, destroying 4 months of labor of its old competitor Obelisk.

At that time, David Warrick, the founder of SiaCoin and owner of Obelisk, did not fulfill his soft fork promise and gave Bitmain a chance to fix the situation.

Actually, the situation was corrected by itself. At the start of sales, Bitmain promised a daily profit of $460, which in just 10 days fell by 2 times, with only $10 to date.

Estimated Rewards

Image source: Whattomine

Yellow card #1

The winter party A3 was not sold out yet when Bitmain announced a new model, which this time would take up the extraction of more popular coin, Monero (XMR):

Already tense, the state of things was further fueled by Baikal, which following its rival hastened to bite off a piece from the Monero pie. Developers of the latter were less compliant than SiaTech and kept their promise to conduct a hard fork for resisting ASIC mining. Nevertheless, Bitmain didn’t arrive and withdrew from responsibility for possible problems with Monero, promptly placing the following disclaimer on its website:

“One major cryptocurrency which is using CryptoNight hash function is about to change their PoW algorihtm [CT: site misprint], and according to their public statement, it is purposely to brick ASIC mining rigs including X3. When you buying it, you are betting that they are wrong.”

Although ASIC miners support other coins, for example, Bytecoin, Aeon and Dash, what about the $4,500 profit promised per month that turned into a pumpkin?

Monthly return as of April 26, according to Cryptocompare

Antminer

Image source: Cryptocompare

Monthly return as of March 17, according to Cryptocompare

Antminer

Image source: Cryptocompare

Particularly as many users are dissatisfied with the the reduced profitability and unusable equipment that “crashes every 30 to 40 minutes and restarts the PC”.

Post

Yellow card #2?

Bitmain owners would not have been themselves, had they not coveted a more delicious crypto piece. On April 3, developers announced the release of the “world’s most powerful and efficient EtHash ASIC”, now under the Ethash algorithm, which Ethereum and Ethereum Classic work on.

The master of surprises from China successfully refuted the general belief that the Ethash protocol is ASIC resistant and Ethereum can be mined only through traditional GPU cards.

In addition to Bitmain, three other companies are working in this direction, one of whom – Halong Mining – recently joined the Blockchain Defensive Patent License initiative with a patent for the overt version of AsicBoost technology.

It seems that this caused concern in the Ethereum Foundation, which until then had been slow to move to the Proof-of-Stake (PoS) algorithm for reducing the role of mining. Is Bitmain sure that Ethereum will not be able to abandon PoW, and the transition to PoS will result in just another Ethereum classic-style hard fork?

While one of the Ethereum developers initiates a hard fork Ethereum Improvement Proposal (EIP) #958 on Github, and the other one receives a 57 percent vote from his Twitter followers supporting this radical measure, Vitalik Buterin shared with Cointelegraph his opinion that the threat is overestimated:

“I am in principle open to it, but I feel it’s early to commit to a specific fork, because we still know fairly little about what kind of ASICs we’re dealing with, whether they are really ASICs or just super-optimized GPUs with non-essential parts stripped out, and what options there are for changing the algorithm.”

He also told Cointelegraph that he expects it “to continue to be debated within the community in the short to medium term”.

It seems that he is right. While some users expect to see a large number of GPU cards coming to the secondary market soon, others pay attention to the fact that by the time the Antminer E3 reaches the consumer, it may actually lose its relevance. According to AsicMinerValue, E3 owners will get $7.38 per day or $221.36 per month after deducting electricity costs.

Profitability

Image source: AsicMinerValue

While Bitmain again shirks responsibility and happily accepts orders for the Antminer E3, no more than 5 units are able to be ordered at a time. According to the manufacturer, by the time the shipments start, the performance and energy efficiency of the model will be improved.

Penalty bench risk

Bitmain’s monopoly continues to grow. At the same time, the number of available coins decreases and the number of miners remains the same. The debate is becoming more acute, shifting more pressure on the development team. The creators of ZCash were openly accused of betraying the interests of the community, Monero conducted a hard fork, and Ethereum is on the way to changing the algorithm.

While some companies conduct hard forks and others occupy waiting positions, Bitmain and its colleagues are actively bringing more and more powerful devices to the market that can supplant obsolete configurations. However, it is worth remembering one weak spot of ASICs is they can be hit by ASIC Resistance followers. This is the impossibility of reprogramming the core. So, fundamental changes in the PoW algorithm could soon send Bitmain to the panel bench.

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Report: Stealth Crypto Mining Much More Prevalent In Higher Ed Than Other Industries

Both intentional cryptocurrency mining and cryptojacking is becoming more prevalent on college campuses than in any other industry, according to a blog post published March 29 by cyber attack monitoring firm Vectra.

Vectra analyzed five industries where crypto mining – which the blog post defines as “an opportunistic attack behavior that uses botnets to create a large pool of computing power”, incorrectly combining crypto mining and cryptojacking into one use case – has occurred from August 2017 to January 2018, finding that “higher education” sees more mining than the other four industries combined.

Top 5 Industries with Bitcoin

Universities are not able to monitor their networks as strictly as corporations, “at best advis[ing] students on how to protect themselves and the university by installing operating system patches and creating awareness of phishing emails, suspicious websites and web ads,” leaving college campuses more open to cryptojacking schemes. The blog post notes that given the “free source of power” provided by universities to their students (meaning free of charge to students, not free of charge in essence), “[l]arge student-populations are ideal pastures for cryptojackers.”

Students, rather than malicious cryptojackers, taking advantage of this “free power” are “simply being opportunistic as the value of cryptocurrencies surged over the past year,” Vectra’s blog post writes.

Joey Dilliha, a student at Western Kentucky University, told financial news site MarketWatch that he mines crypto with a Bitmain Antminer in his room with his school’s “free electricity”:

“I believe more people should be doing it. It’s a super fun, and cool cheap way to be introduced to the market of mining.”

Dilliha adds that because the mining rig is actually a banned item in his dorm – due to it being a fire hazard – he has to “turn it off and put a blanket over it” during “dorm room check days,” adding that his “RA loves to come in and talk about it with me.”

 In January of this year, Stanford University had posted a warning against crypto mining on campus, as school resources “must not be used for personal financial gain,” as well as citing the school’s chief information security officer:

“Cryptocurrency mining is most lucrative when computing costs are minimized, which unfortunately has led to compromised systems, misused university computing equipment, and personally owned mining devices using campus power.”

Vectra also notes the problems with cryptocurrency mining and crypto jacking as “creat[ing noise that can may [sic] hide serious security issues; […] impact[ing] the reputation of an organization’s IP address […] ; [allowing] cybercriminals [to] buy access to compromised computers to launch targeted attacks against universities.”

Vectra’s blog post, which has already several times confused crypto mining and cryptojacking, then goes into detail about the mechanics of cryptojacking, mentioning Coinhive and the CryptoNight algorithm-based Monero as common ways for cryptojacking to take place.

Cointelegraph recently reported on the ethics of cryptojacking, citing both cases where permission was asked before taking over a computer’s processing power to mine (like Salon.com) as well as malicious or unknown use cases (like Showtime and Telecom Egypt).

In conclusion to their blog post, Vectra writes that

“Cryptojacking and cryptocurrency mining are profitable, opportunistic endeavors that will likely increase as they replace ransomware and adware as the de facto method for individuals looking to make a fast buck.”

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Monero and SiaCoin Reject Bitmain’s ASIC Miners, Who Could Be Next?

On March 24 the creators of Monero made an unprecedented statement – the project devlead, Riccardo Spagni, warned that the coin’s protocol would be changed every six months to make the cryptocurrency less appealing to application-specific integrated circuit (ASIC) miners.

The measure was initiated after Bitmain announced a new super powerful Antminer X3 ASIC miner designed specifically for calculations based on the CryptoNight algorithm, which is the basis for such cryptocurrencies as Monero (XMR), ByteCoin (BCN) and AeonCoin (AEON).

The dominance of Bitmain shook the reputation of industry giants AMD and Nvidia, whose shares fell sharply after Wall Street firm Susquehanna reported that Bitmain’s new Ethereum miner would increase its competitiveness on March 26.

Manufacturers of miners monopolize the market

Today, when the cryptocurrency market becomes stagnant, mining may be the only way to earn profit. This forces the largest manufacturers of video cards and specialized ASIC chips to bring new, more productive models of devices to the market. ASIC-based miners overtop competitors’ CPUs and GPUs, creating a real threat of mining concentration between the largest players provided with the most powerful equipment.

Some in the Blockchain community are concerned about such kind of centralization that could damage network security. Actually decentralization based on the miners’ competition helps to defend the system and its participants, protecting the network from intruders. That’s why the token developers are forced to create artificial obstacles to the use of ASIC equipment.

Due to the present monopoly on the production of ASIC miners and the expansion of its positions in the mining equipment market as a whole, according to Bernstein analysts, Bitmain earned about $4 bln last year, the same amount as Nvidia. It is noteworthy that Bitmain achieved this level six times faster than Nvidia, who took 24 years to achieve these levels of profits.

Antminer X3 developers promise $4,500 profit per month

As stated by CryptoCompare, the new ASIC can give up to $4,500 in monthly profits to its owner, but its calculation process is based primarily on the involvement of devices in Monero network transactions, which may lead to disrupting XMR network functioning.

Antminer X3

Image source: CryptoCompare

Monero reaction

The developers of Monero, in their turn, published defamatory posts about the insolvency of Antminer X3. Monero devlead Riccardo Spagni noted on his Twitter page that it “WILL NOT work” for Monero, since Monero’s core development group (CDG) is going to perform regular updates of the hashing algorithm.

Moreover, the upcoming hard fork will be aimed at making significant changes to the Proof-of-Work (PoW) protocol in order to prevent potential threats from ASICs.

To prevent the centralization of mining, changes would be regularly made in the protocol, making it impossible to calculate Monero using the new high-performance devices. The first update, preventing XMR mining on any types of ASIC chips, has already been released.

Some experts expressed their support for the official devteam of Monero on the issue of updating the algorithm.

Antonio Moratti, co-founder of the GoByte platform, which uses the NeoScrypt algorithm, said that he “would do the same”. He told Cointelegraph:

“GoByte was X11 in the testing phase. And some users have already started mining with ASICs. And we decided for NeoScrypt. Even that the GPU temps are not so good compared to other algos. I think XMR will have a new algo. I would do the same.”

David Vorick, the founder of Siacoin, wrote on his Reddit post:

“Bitmain has historically been very greedy, and very willing to sacrifice the well-being of the community, of their customers, and of the ecosystem, if that means they can make a couple of extra dollars.”

Surge of hashrate

Monero’s steps to prevent potential threats from new Bitmain equipment could have been caused by the surge of hashrate up to 1,07 GH/s in their transactional network, which was observed in mid Feb. 2018, when the values of XMR tokens’ mining process soared.

Monero (XMR) Network Hashrate Chart

Image source: Coinwarz

Some users linked the surge to the subsequent Bitmain announcement to sell used devices. A month ago one popular Reddit user made a post where he suggested that Bitmain might “calculate very thoroughly when to announce and sell them [ASICs] so their customers will be (or think they will be) able to make some pennies”.

Here is how he describes what comes next – “dump their used equipment on the market by batches as the new version batches comes in freshly manufactured”.

Bitmain reputation: developers feel “anxiety”

Earlier, Bitmain had already acquired an ambiguous reputation before the start of sales of a new model. In January, amid negative rumors about the chance of extremely high network values, which could be created by the mass launch of Antminer designed for SiaCoin, the latter refused to support the algorithm at all.

Unexpectedly, Siacoin founder David Vorrick and his ASIC manufacturing company, Obelisk, fell into competition with Bitmain, which almost has a monopoly on Bitcoin mining equipment.

In his Reddit post Vorick expressed dissatisfaction, saying that the developers of Siacoin feel “anxiety”.

Later, SiaTech leader Zach Herbert gave an official green light to Bitmain and said they would “not invalidate A3 miners via soft-fork unless Bitmain takes direct action to harm the Sia project”.

Mine or buy?

Although Antminer X3 can contribute to the production of cryptocurrencies based on CryptoNight technology (DarknetCoin, AeonCoin etc.), the previous equipment for mining XMR usually did not bring a profit comparable to the potential profit from Monero’s trading circulation.

According to the analysis made by Reinisfischer XMR mining is “profitable, but not as lucrative as mining ether”, moreover “it would break even after a year of operations”.

For instance in December with $3,880 (the average price of 12 GPUs) one could earn about $1,940 in 10 days,

Monero Chart

Image source: Coinmarketcap

while CryptoCompare says mining with GPUs for the same price would bring only $325 per month.

Chart

Image source: Cryptocompare

Beyond the immediacy of security issues, in general, Bitmain’s activity does not affect the state of individual cryptocurrencies.

That’s what co-founder of GoByte platform, which works on the principle of decentralized mining – a potential competitor of the current technology, Antonio Moratti, said to Cointelegraph:

“I don’t think a privacy coin would want to gather a lot of attention. XMR can mature further on its own without any further PR scandal.”

Will CryptoNight algorithm be used?

The fundamental task of CryptoNight is to eliminate the gap in the production of tokens between users of standard PCs and owners of specialized ASIC devices. The algorithm technology is based on allocating a data block with an unpredictable sequence in the computer’s RAM, with the data temporarily stored in RAM and not calculated at each access.

Compared with the same Scrypt algorithm, the CryptoNight structure has a number of technical advantages:

  1. small time intervals between blocks (transaction speed less than 60 seconds),
  2. smoothly falling emissions,
  3. less central processing unit (CPU) and graphics card heating than when mining on other algorithms,
  4. use of CPU + GPU binding and thus achieving faster access to RAM, increasing the speed of transactions.

Among other advantages of this hashing algorithm there are adequate conditions for its use on CPUs, where even passive income is possible (for example, on some Intel Xeon E3 users steadily receive up to $2 per month by using CryptoNight).

Who’s next?

Bitcoin, Litecoin, Dash, Decred and Sia – one by one these cryptocurrencies have become “victims” of ASIC-miners. The miners could consider the cryptocurrency becoming more centralized after the appearance of specialized devices, although the practice has not yet proven this.

Monero can become the first of the leading cryptocurrencies that will launch a radical means of combating ASIC-miners through the update of CryptoNight hashing algorithm. The further events will show how much the algorithm will be modified and whether this will affect the sale of Antminer X3 models.