The public turnaround may have positive effects for chip manufacturers’ bottom line, but what about mass-market miners?
Privacy-centric cryptocurrency monero will reportedly switch to a new proof-of-work algorithm in October.
Privacy-centric cryptocurrency monero (XMR) plans to switch to a new proof-of-work (PoW) algorithm in October. The new algorithm follows an agreement with permanent storage network Arweave, which will fund an audit of the new algorithm, an Arweave spokesperson told Cointelegraph via email on May 23.
Arkweave said that monero will be the first to use the RandomX algorithm, thus replacing CryptoNight. Until now, monero developers reportedly hard-forked the network once every 6 months to ensure application-specific integrated circuit (ASIC) resistance by implementing small changes to CryptoNight.
However, this approach was criticized for being overly centralized, the spokesperson notes. Arkweave claimed that RandomX requires less developer intervention to stay ASIC-resistant, and will render graphics processing unit-based mining uncompetitive.
Arweave has purportedly partnered with monero developers to co-fund the audit, which is expected to reach $150,000 of funding and will be conducted over the next two months.
The GitHub page dedicated to RandomX also notes that the algorithm requires miners to dedicate over two gigabytes of RAM to the process, which could make cryptojacking attempts harder to hide.
As Cointelegraph recently reported, a global threat report from Check Point Research has concluded that the three most common malware variants detected in April were crypto miners, which often mine monero.
At the beginning of May, security intelligence firm Trend Micro Inc reported that cybercriminals are now reportedly exploiting known vulnerability CVE-2019-3396 in the software Confluence, a workspace productivity tool made by Atlassian, to mine monero.
Ethereum core developer Hudson Jameson announced that an audit of the ASIC-resistant Proof of Work algorithm ProgPoW has been funded.
Ethereum (ETH) core developer Hudson Jameson announced that a third-party audit of the Application Specific Integrated Circuit (ASIC)-resistant proof-of-work algorithm ProgPoW has been funded. The dev made the announcement during the latest bi-weekly Ethereum core developer meeting held on April 26.
During the call, it was specified that the targeted funding amount of 50,000 units of decentralized, Ethereum-based USD-pegged stablecoin DAI had been reached. The funds were reportedly crowd-sourced through donations.
Jameson noted that the audit is set to begin “this week or next week hopefully.”
ASIC refers to mining hardware that uses single-purpose chips, which are tailored to more efficiently mine cryptocurrency based on a specific hashing algorithm. Meanwhile, set-ups that use graphics processing units (GPU) are less specialized, and have therefore to date struggled to compete for rewards on the network with those that deploy ASICs.
ProgPoW aims to decrease the efficiency advantage of ASICs over GPUs.
A recent Cointelegraph analysis uncovered that as of lately, stablecoin DAI has been struggling to keep its peg, but its proponents apparently believe that it will soon become crypto’s default stablecoin.
Despite the large number of opponents and rumors of collusion between Ethereum developers and GPU producers, the ProgPoW algorithm has been supported by 94 percent of the community.
Ethereum (ETH) network users have unanimously supported the ProgPoW algorithm, which is expected to make the platform resistant to application-specific integrated circuit (ASIC) miners. Initially, opponents of the update prevailed over supporters by a margin of 96 percent, according to a Cointelegraph report on Feb. 15. The current scenario is exactly opposite, with 94 percent of voters favoring the implementation of ProgPoW, as evidenced by the Etherchain charts.
What is ProgPoW?
Simply put, ProgPoW is a version of the proof-of-work (PoW) algorithm, which is supposed to smooth the transition of the Ethereum network to proof-of-stake (PoS). As a part of this process, developers are exploring and proposing different solutions to fight off the mining difficulty bomb and make the network stable and resistant to attacks.
One of them is ProgPoW (programmatic proof-of-work), being designed by Ethereum developers to eliminate the gap in efficiency between Ethereum ASIC miners and graphics processing units (GPU) by making ASIC mining less efficient. This is necessary to protect the Ethereum network against a monopoly of ASIC hardware manufacturers.
The principle of the ProgPoW operation is slightly different from other algorithms that are resistant to ASIC miners. It is supposed to make the production of ASICs unprofitable since the manufacture process itself will require more financial and labor resources, and thus won’t pay off.
Making GPU cards more competitive and reducing centralization will be possible through making the task condition for mining impermanent and using all the resources and potential of video cards. The issue is that ASIC miners are designed for one specific task in mind: calculating blocks for mining cryptocurrencies. Meanwhile, video cards are flexible and can perform a number of tasks 一 from mining to transmitting an image.
Using a random task sequence eliminates the possibility of creating a fixed pipeline, as it happens with ASIC miners. In other words, to work with ProgPoW, miners need to be flexible.
Developers plan to reach such results with five innovations, under which the algorithm work will be based on computational capabilities, bandwidth and memory capacity.
Keccak changes: The Keccak hash function size has decreased from the 64-bit keccak-f1600 to the 32-bit keccak-f800. The latter has been optimized for 32-bit platforms for better compliance with the architecture of video cards.
Increased mix state: This is the number of processor registers in which intermediate values can be stored. They are significantly faster than RAM, because they are located inside the processor. In ASIC miners, chips are small and the number of registers lags behind graphic processors in performance. As a result, ASICs are forced to use RAM to work with this feature, which is several times slower.
Adding a random sequence of calculations in the main loop: The chip makes it impossible to create an ASIC device with a fixed pipeline, which could increase the speed of work or reduce consumption.
Adding reads from a small, low-latency cache with random addresses support: This causes ASICs to follow GPU memory hierarchy rules and limits their capabilities and performance.
DRAM increased from 128 to 256 bytes: Bigger volumes favor video cards. Specialized ASICs are not able to optimize a memory controller for the sake of improved performance.
Why do we need ProgPoW?
The main reason for developing the ProgPoW algorithm is the influence that ASICs have on the cryptocurrency sphere, which jeopardizes the main principle of cryptocurrency 一 decentralization 一 for the sake of making larger profits. Both giants like Bitmain and Innosilicon, and new companies like ASICMiner and Spondoolies, which monopolized the market, became the main reason for finding solutions to prevent centralization.
At the moment, Ethash, which is expected to be replaced by ProgPoW, is considered the most ASIC-resistant algorithm. Meanwhile, among the most vulnerable to attacks algorithms 一 Equihash, CryptoNight, X11 一 the efficiency of using ASICs exceeds that of GPU cards by several times. Ethash ASIC miners give users only a double advantage over video cards.
On April 3, 2018, Bitmain officially announced Antminer E3, capable of producing 180 mega-hashes per second (MH/s), with only 800 watts of power consumption. The ASIC miner model designed to mine ETH inspired other companies to join the ASIC hardware production, with unpleasant consequences for the Ethereum community 一 mainly related to the issues of security and integrity.
First of all, GPU farm owners started to suffer losses and lost interest in maintaining the network. In 2018, the revenues of the GPU cards producers fell and have been moving inexorably lower since then. Data provided by analytical company Jon Peddie for the Q4 of 2018 showed that total GPU shipments decreased by 2.65 percent from the preceding quarter, AMD shipments decreased by 6.8 percent, Nvidia decreased by 7.6 percent, and Intel’s shipments decreased by 0.7 percent. In total, year-to-year GPU shipments decreased by 3.3 percent. Global technology company Susquehanna revealed that the monthly profit generated for mining ETH with GPU rigs had dropped from about $150 in the summer of 2017 to zero values in November.
Moreover, hash rate and power became concentrated in fewer hands, which puts the network’s decentralization and security at risk. The reason is the market dominance of such mining giants like Bitmain, which built up its monopoly by producing new ASICs for top coins. The ecosystem has become increasingly centralized and vulnerable to attacks since then.
As new coins appeared on the CoinMarketCap charts, Bitmain stamped mining devices, one after another, for Monero, SiaCoin, ZCash, Bitcoin Cash. Coin developers began to worry about the threat of a 51 percent attack 一 a phenomenon when an attacker with 51 percent of a network’s mining hash rate in their hands is able to manipulate the network.
The last straw was on April 3, when Bitmain developers announced the release of the “world’s most powerful and efficient EtHash ASIC” for mining Ethereum and Ethereum Classic.
Since then, the Ethereum Foundation has been working on solving this problem, and as a result, the ProgPoW proposal appeared.
At the moment there are not many programs for mining cryptocurrencies on the ProgPoW algorithm, possibly because of the existing equipment optimization problem. The first cryptocurrency on ProgPoW was Bitcoin Interest (BCI), which was switched to a new algorithm in September 2018. Its developers presented the first miner for the new algorithm.
One of the latest miners that received support from ProgPoW was the TT-Miner chip. It is closed-source software, available only for Windows and running on new Nvidia video cards. Additionally, this miner supports Ethash, UBQhash and MTP algorithms. The developers charge a commission of 1 percent, which is already included in all the devices.
Community reaction and opponents
The new algorithm has caused a lot of controversy in the community since it not only protects the network against ASIC mining, but also allegedly gives an advantage to Nvidia video card owners over users who have AMD devices. Vitalik Buterin called it a distraction, while many other developers are skeptical of the new algorithm. In the guidelines for voting, Ethereum developers claimed that, due to a number of trolling messages appearing on social networks, they cannot understand which voting accounts are real:
“We have noticed a lot of trolling and shills on both sides of the debates from anonymous accounts on forums, youtube, telegram, glitter, reddit and twitter. There is no way to know if these accounts are real people who actually have economic stakes in ethereum, or are simply fake troll or shill accounts funded by one side of the debate.”
The developers also don’t exclude a probability of resistance from miners, some of whom may be dissatisfied with the decline in already small incomes. This is evidenced by the relatively small support among the mining pools: Only 35 percent of them supported the upcoming update of the algorithm 一 though Ethermine votes made up 36.5 percent and Sparkpool 27.6 percent of the total number of votes.
Ethermine is the largest Ethereum network pool, which controls 27 percent of its entire hashrate. It is not known how the voices are distributed within the pools, but it can be assumed that the users are divided approximately equally. Thus, for each person who loses revenue as a result of ProgPoW, there is one who may benefit from other miners leaving the network.
Ethereum users have reacted differently to the new algorithm, with some of them being concerned about the possible drop in revenues and others doubting whether this step will be efficient. Martin Koppelmann, CEO and co-founder of Gnosis, thinks that such a radical update should be implemented only if it’s really necessary:
I am against a #progPOW hardfork.
To me there are only two legitimate reasons to hard fork Ethereum.
1) Address an existential threat
2) Bring Ethereum one step closer to a long term sustainable stable state#progPOW is tinkering in favour of one group (GPU miners) vs another.
— Martin Köppelmann (@koeppelmann) January 6, 2019
Jorge Izquierdo, co-founder of Aragon, agreed that ProgPoW is not the number one task for the development of the Ethereum network:
Is anyone really considering changing the POW algorithm of Eth 1.0 now?
I’m not interested in debating whether it is a good idea, just the fact that it shouldn’t be a priority at all for Ethereum in 2019. Let’s put all our energy towards POS pls. https://t.co/Pk1hPs0zTv
— Jorge Izquierdo 🦅 (@izqui9) January 7, 2019
Some experts and users believe that the solution of making ASIC mining unprofitable may lead to more dramatic consequences than the reduction of miners.
For example, Eric Conner, developer of Ethhub.io, suggests that ProgPoW could lead to a chain split:
If ProgPoW causes a chain split, which is worse?
1. ASIC use on the Ethereum network.
2. Brand dilution of the Ethereum name via a chain split? https://t.co/HZXFPK2z8m
— Eric Conner (@econoar) January 5, 2019
Another opposing point of view refers to using GPUs in countries with expensive electricity:
Still not a fan of ProgPoW, it’s not good to run GPU’s at this high power usages for countries with higher electricity costs than 0.20$/kwh, it might eliminate whole Europe this way amd gets kinda centralized in USA, Iceland and Chinese farms due to low power costs
— BuriedONE (@BuriedOne) March 2, 2019
A number of miners and companies are also concerned about the fact that dominant ASIC producers may manufacture new hardware capable of working on ProgPoW. In particular, the co-founder of Sia, David Vorick, suggested that the new algorithm release won’t stop ASIC producers, and some of them might be able to secretly develop suitable devices in order to prevent possible hard forks.
Alexey Akhunov, one of Ethereum developers, said in a reply message:
“If we want to obsolete the current EtHash mining devices, but at the same time not to induce more secretive behaviour on the part of ASIC manufacturers, we need to ‘embrace’ it and switch to an ASIC-friendly algorithm now instead of an ASIC-unfriendly algorithm. Which [is] the opposite of what we are doing.”
Vorik also assumed that there are several large companies interested in producing special hardware for mining ETH, and the release of such devices would only be a matter of time.
The conspiracy theories are vigorously discussed on the internet, and according to one, the team allegedly working on ProgPoW represents the interests of the leading manufacturers of GPUs 一 Nvidia and AMD.
— Martin Köppelmann (@koeppelmann) January 7, 2019
Fuel was added to the fire by a statement of a team representative, who admitted that they have communicated with both Nvidia and AMD:
“We were lucky enough to have an email review that included engineers from the Ethereum Foundation, Ethereum Core Devs, Nvidia and AMD. The Nvidia and AMD engineers gave the algorithm a generally positive review.”
However, the allegations related to any agreements or conspiracies haven’t been proven, yet.
Despite the fact that the update launch date is still unknown, the preparation for it is well under way. Ethereum Cat Herders, the group working on Ethereum hard forks, is going to audit the ProgPoW code once the voting ends. At the moment, developers are searching for companies to do the audit and are trying to raise $100,000 to perform it.
Meanwhile, Parity Technologies already integrated full ProgPoW support into its client, and other clients are testing the update, which means that the release may be just a matter of weeks away. Developers are also discussing the possibility of including the ProgPoW update in the next Istanbul hard fork in case two third-party audits doesn’t reveal any significant bugs or potential threats to the network.
GPU producer Nvidia is facing a class action lawsuit over the losses reported by the company when demand for GPUs by miners diminished.
Graphics processing unit (GPU) producer Nvidia is facing a class action lawsuit over the losses reported by the company when lower crypto prices diminished demand for GPUs by miners. Schall law firm announced the lawsuit on Dec. 24.
The complaint states that “the Company made false and misleading statements to the market.” Namely, according to the announcement, Nvidia “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary.” Shall states that the GPU producer also declared:
“Any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.”
As Cointelegraph recently reported, after the cryptocurrency mining crash, Nvidia was the worst reported performer in S&P 500. After a massive sell-off of its shares, the stock price of the company fell by 54 percent.
In the Susquehanna analysis, the profit per month for GPU Ethereum miners hit $0 by Nov. 1, down from nearly $150 in July 2017.
Earlier this week, Japanese firm GMO Internet announced that they would be leaving the mining sector, citing extraordinary losses over the year.
Gaming hardware producer Razer has launched its redesigned native virtual currencies and a desktop SoftMiner.
United States-based gaming hardware manufacturer Razer has redesigned its native virtual currencies and loyalty system and launched a desktop mining app, according to a blog post published on Dec. 12.
Founded in 2005, Razer has become a leading gaming hardware and software manufacturer in the U.S., Europe, and China. The company’s software platform reportedly has more than 50 million users. In the first six months of 2018, Razer’s revenues were $274.2 million.
Razer has redesigned its native reward system and virtual credits Razer zGold and Razer zSilver. Launched in 2017, the virtual currencies have subsequently gained over 5 million users, according to the post. From now on, the Razer zGold and Razer zSilver will be rebranded as Razer Gold and Razer Silver respectively.
In regard to Razer Silver, gamers will be rewarded with the currency for every Razer Gold spent, wherein the more Gold gamers spend, the more Silver they earn. Users can further exchange Razer Silver to products, discounts and vouchers.
The company is also launching a desktop app called Razer SoftMiner, which utilizes idle graphics processing unit (GPU) power of users’’ devices to solve blockchain-based puzzles on the back-end. Once users install and launch the app, they will be awarded with Razer Silver depending on the amount of time SoftMiner has been operating, and the processing power of their PCs. Currently, SoftMiner is reportedly in beta and supports 5,000 users per week.
However, some have called the efficacy and economy of Razer’s miner into question, claiming it is a scam. A Twitter user Scott Chicken commented on Razer’s announcement of the new product, calculating that the company earns at most £0.35 ($0.44) per day mining at full power, making each Silver worth £0.0007 ($0.00089). Chicken said that “running this at full power, every single day all day it takes 560 days to earn a Razer keyboard, valued at £199 [$251] as of their website.”
When the crypto chips are down companies often seek alternative methods of generating income. Gaming equipment giant Razer wants to pay gamers to mine crypto using their graphics cards.
The new crypto rewards program is called ‘Razer SoftMiner’, and it enables users to put their GPUs to work mining “Silver” which according to the firm is not actually a cryptocurrency. The catch for the miners is that they don’t get to keep what they mine but will get rewarded in the way of discounts or offers from the company. In a Tweet the firm stated;
“Have a gaming rig on idle at home? Here’s a new way to score Razer Silver: launch Razer SoftMiner on your PC and start racking up Silver—one step closer to the reward you want, for doing nothing at all.”
It does come with the caveat that running the software “uses a substantial amount of your GPU power,” according to PC Gamer. The FAQ goes on to explain;
“We work with crypto mining technology to harness your computer’s GPU. In turn, we award you with Silver, giving you access to Razer’s ecosystem and suite of rewards.”
In other words the San Francisco based company will be keeping the crypto that users mine and offering them other tokens to trade for ‘rewards’. It has not specified which cryptocurrency will be mined but it will have to be one that can be done using graphics cards and not higher powered hardware. There does not seem to be an advantage for users that can simply install their own software to mine crypto which they can at least keep themselves.
Razer has added that mining speed will be affected by the specifications of the GPU and obviously the amount of idle time that can be dedicated to it. “If you have the proper setup, you can earn approximately 500 Razer Silver or more within a day!,” it added without specifying the value of this ‘silver’.
Someone had crunched the numbers and came out with a value of around $0.44 per day mining at full power, or $0.0009 per token. Another pinch is that the silver mined expires after a year so it must be redeemed before then which prevents amassing a whole lot of it.
Considering the cost of electricity and the wear and tear on the hardware this does not sound very lucrative at all. A win for Razor it seems, especially if it can accumulate enough crypto at low prices and then sell the stash when the markets recover.
The post Gaming Firm Wants to Pay Players to Mine Cryptocurrency appeared first on Ethereum World News.
ASUS to allow its graphics card owners to mine crypto and cash out via PayPal and WeChat through a new partnership.
The new partnership allows gamers to monetize idle GPUs when the units are not occupied by graphic-consuming processes by mining cryptocurrencies such as Bitcoin (BTC).
However, Quatumcloud does not guarantee specific profits or outcomes for users, stating that users have to consider usage costs on their own, according to U.K.-based tech publication HEXUS.net. The GPU-mining startup claims to provide high standards of customer data protection compliant with General Data Protection Regulation (GDPR).
Earlier in November, ASUS teamed up with California-based semiconductor supplier AMD and other major tech companies to produce eight new crypto mining rigs. Partner companies reportedly include Sapphire, ASROCK, and MSI, among others.
In July, Cointelegraph reported that GPU prices were declining along with sinking prices in crypto markets. Other GPU manufacturers like Nvidia have been negatively affected by the current bear market. When the firm announced its Q3 results earlier this month, it revealed a “crypto hangover” due to disappearing sales to crypto miners.
The price of specialized graphics processing units (GPUs) has been declining along with sinking prices in digital currency markets, Computerworld reported July 10.
While at the end of 2017 and beginning of 2018 cryptocurrency mining caused a sharp rise in the price of high-end gaming cards, the tendency seems to have reversed as crypto markets continue on a downward slope.
Add-in board (AIB) prices are reportedly falling and supplies increasing amid a severe drop in cryptocurrency prices. Manager of digital media at Jon Peddie Research C. Robert Dow told Computerworld that they predicted the drop, adding that “the cost to run the mining rigs is not insignificant, so when the price for the currencies drop… people will run rigs and choose to dump AIBs on the secondary market hoping to recover some cost.”
A survey conducted by Jon Peddie Research revealed that crypto miners purchased over 3 million AIBs to the tune of $776 million in 2017, where most of them had been produced by semiconductor and computer microprocessors manufacturer AMD. At the end of 2017 and the start of the current year, many high-end expansion boards were sold out, leading to a price increase.
According to Computerworld, in April AMD’s OEM 4GB RX 580 six-pack was sold out at the price of $3,600, while today it is available for $2,500. An Nvidia GeForce GTX 1080 Founders Edition, 8GB GDDR5X PCI Express 3.0 Graphics Card was sold out at a price tag of $1,050, but now can be purchased for $709. Dow commented on the changes:
“We also suspect that Nvidia and AMD have some built up inventory, and that will affect ASPs as well. Prior to the surge in buying of AIBs for cryptocurrency mining, AIB prices were flat to declining slightly which is a trend that will continue at least until new families of cards are introduced.”
The recent price slump has not deterred manufacturers from releasing new cryptocurrency mining hardware. In May, U.S. hardware manufacturer ASUS announced the release of its “second generation” cryptocurrency mining motherboard, which is scheduled to launch at the beginning of the third quarter of 2018.
In April, Chinese tech giant Bitmain announced the release of an Ethash ASIC miner, calling it the “world’s most powerful and efficient EtHash ASIC miner.” Bitmain surpassed the U.S. GPU manufacturer Nvidia in terms of overall profits in 2017, earning an estimated $3-4 billion and taking 70-80 percent of the market for Bitcoin (BTC) miners and ASICs.
New research suggests that prices for high-end graphics cards – coveted by both cryptocurrency miners and gamers alike – are falling.
The research was conducted by John Peddie Research, a tech marketing and consulting firm based in California. As tech publication Computerworld reported on Tuesday, the report shows higher-priced products from Advanced Micro Devices (AMD) and Nvidia have dropped significantly from their highs experienced earlier this year.
For example, according to Jon Peddie Research, the price of an OEM 4GB RX 580 six-pack – a top-notch GPU from Advanced Micro Devices – was $3,600, having completely sold out as of April. But that product is available on the market for $2,500, a reduction of $1,100.
“We have predicted a drop in [application specific processors] as [cryptocurrency] prices dropped,” C. Robert Dow, manager of digital media at Jon Peddie Research, said in an email to the publication, adding:
“The cost to run the mining rigs is not insignificant, so when the price for the currencies drop…, people will run rigs and choose to dump AIBs [add-in-board] on the secondary market hoping to recover some cost.”
Meanwhile, the research’s data also show that the number of AIB shipments directly to cryptocurrency miners dropped about 55.5% compared to the same quarter of last year.
From the charts
Additional data provided by a website called PCPartPicker, which tracks the prices of computer components, also indicates that there is a general downtrend occurring for GPUs.
For example, the chart below shows price developments for the Radeon RX Vega 64 – a product hailed by some tech bloggers last year as a premier tool for mining cryptocurrencies. In spite of several short upticks, the price of that product seems to have peaked in early March.
Similar accolades were published for the GeForce GTX 1070 Ti – but it, too, has seen a gradual price decline since around the same time.
Whether this means anything in the long-term remains to be seen – cryptocurrency mining is effectively an electricity arbitrage, where gains are made when the cost of mining (including hardware, energy and labor) is less than the return on the coins once sold.
Given that the cryptocurrency market has declined overall since early this year, demand would, in theory, fall in tandem with those figures.
More answers could come in the form of future financial results from Nvidia and AMD, both of which have made a point to discuss the impact of crypto mining on their bottom lines. While business was great by the end of last year, that state of affairs may be changing, according to these figures.
GPU image via Shutterstock/Graphs from PCPartPicker.com
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