Why Ethereum should adjust algo on next planned Hardfork? From a Miner’s perspective

Who’s this dude?

First a brief background. As a miner for nearly 8 years, I got my start in Bitcoin mining in 2010. With a pair of Gigabyte 5970’s and a bleeding edge pair of MSI 6950’s (2011ish), I was hooked nearly instantly. See in that time, bitcoin was not worth a lot and mining was at a net power/hardware cost loss (at the time). The entire concept of a decentralized, PoW incentivized network, of which anyone in the world the a little bit of technical ability building a PC and a few parts could contribute to a global network for a token was mind-blowing to me. The conceptually limitless potential regarding financial transactions, information immutability and things at the time I couldn’t began to understand would be fundamental in disrupting nearly everything. This was before a lot of very popular names in the space talked about any of the financial disruption, concepts of potential revolution of institutions, and well before scaling debates and other cryptos were a thing.

The simplest use case that I kept trying to get across to people was the finality of the transaction. To me, that was a HUGE and I could see in my regular business dealings that the fact I could trade a token to someone, the second there was a validation on the network, the decentralized consensus that allows for the cryptographic guarantee is fundamentally a game changer. The excitement created from witnessing that activity, along with the fact a lightly configured computer in my basement was one of many enabling the aforementioned protocol (bitcoin), bolstered my commitment on evangelization of the tech. By 2013, I decided to start a YouTube dedicated to helping people get into Mining as, at the time, not a lot of mining specific content, from a technical (YouTube) level was produced. From there, BitsBeTrippin was born. Now while the history is good and all, it’s not the main point of this post. My goal is to raise a core focus of community in the discussion of Ethereum and the ASIC issue.

OK, but what’s the so what factor?

The one thing that is lost in the entire discussion with miners is the fact Ethereum has a widely known significant, decentralized and worldwide participating mining community. The influence those miners have on projecting value into the ecosystem (other than a measurable hash power) is an immeasurable network effect of grassroots initiatives that are started by that mining community. Many facilitating education and general evangelization that occurs nearly every day with this robust community.

Make no mistake, Ethereum’s resurgence of PoW mining in 2015 for mining (GPU, CPU) helped expand thousands, potentially 10’s of thousands into the activity of mining, that had a one to many effect on educating general masses and pulling family, friends, co-workers and more into the space, if not for mining, as counterparties buying cryptocurrency. See if you are a miner; your friends, family, friends of family, friends of friends, essentially anyone in your immediate circle at some point find out you are mining due to you talking about it, potentially proudly, and indirectly weave much of the activity in your daily activity. From that initial interaction, you may just get someone into understanding what crypto is, forward them over to a YouTuber, Discord or a Forum to get them more familiar with the subject. This has created many instances that those individuals themselves get into mining or forgo to just purchase crypto instead.

Regarding skeptics on potential numbers (tens of thousands) cited above. The BitsBeTrippin email is filled (over 120k msg since 2016 alone) from individuals, companies, investors, ICOs, general mom and pop shops that discussed some level of mining activity along with the channel having nearly 40k subscribers, 3+ million views and hundreds of thousands of comments of individual miners helping each other with settings etc. There are at least 10+ other channels like ours, some larger now that have 50k to nearly 110k subs with same type of comments citing same questions, providing answers to mining configs. That activity breeds participation, community growth and a range of potential new developers, more content (dApps, wallets, trading tools) and more. A centralized mining provider, such as an ASIC provider will greatly tear down that community that provides so much ancillary benefit into the cryptocurrency space. It’s no simpler than, how many people do you know mine bitcoin? (Not many, for a range of reasons, not to include who wants to own a paperweight after the next gen ASIC comes out) GPU mining and subsequent CPU mining offers the barrier of entry to literally be ANYONE on the planet that can get a CPU / GPU and download some open source software. The proverbial barrier to entry is essentially a local box store or online order from amazon / newegg, about 150 (one card machine) to 3g (moderately nice rig) and a weekend. Pick from a list of YouTubers that show you how to get into the space and you’re off hashing away. ASIC’s centralization is much more of an issue than just a few companies limited/selling the hardware they produce. The missing out on known/known amounts of network effect needs to be weighed.

But what about graphics cards and hardware for PC’s, lets help the gamers?

This is a subject that ultimately in the long run needs to be tackled, but not by the Ethereum Developers. This is a market demand issue and should be handled by nVidia and AMD. If mining remains a long term activity, they will ultimately build a market segment around it, period. I attended, and documented my activity at CES2018 around this very subject. I even got to talk to the nVidia CEO and posted it in one of our videos. They are in the business to make products and generate revenue and live in a world of stockholders and boards. The risk profile on mining is centered around a highly volatile demand cycle on their products. When demand is up, they are wiped out, when demand is down, it’s like cash for clunkers and everyone’s trying to trade in the used goods, so significant market saturation happens. A more clear direction from cryptocurrency networks and a roadmap that shows a support level for a period of time may have a better read on this market for those providers, but ultimately price, profitability will always dictate total international supply issues. Bottom line, do not predicate your decision on those factors.

Cool story, what’s the bottom line for the TL:DR bro’s

Ok … straight to the point…

Pros on adding algo change to next hardfork

• Extensive grassroot community support, existing mining hardware ready and supporting and a resurgence of loyalty from an already vibrant and existing community
• Transparency on effect of ASICs (pre-release) ; look no further than the extensive drop in hash rate on the XMR network — point proven; what’s the estimation on how much of the current hash power is actually silent ASICs
• Long game is still Proof of Stake, as one of my fav. Game of Throne characters said, “It is known”, will start with a hybrid PoW/PoS system. This still encourages PoW participation.
• Social Media, YouTube, Twitch creator community that embolden the message, not just mining. If you look at most of the creators showing people how to mine, many cross pollenate that community engagement with stories on “dApps, Use Cases, Functionality and late and breaking news around the technology” ; Yes, these exist for bitcoin, but not at a creativity level and regular on demand basis as the mining channels, most are “Trade Analysis ‘guru’s (cough)” (don’t worry trader bros, it was an easy jab atm)
• Sticking to the original writing in White Paper of “ASIC resistance” … if the first opportunity you’re met with an ASIC and don’t even take the easy road on an already planned HF not to tweak, what was the narrative if not false? At a minimum set, regardless of roadmap, as long as it doesn’t risk main net functionally, should ‘lean in’ on the opportunity to tweak.
• Send a clear message to ASIC producers that the proverbial easy prey, limited to no risk days are over if they choose to tape out a solution and hide from community. This behavior can be corrected with enough impacts on bottom line.
• Show of unity with the strongly loyal community that helped evangelize Ethereum on top of committing time, money on supporting the network. Everyone understand the long game is moving to a Proof of Stake solution, that being said, a little effort here goes a long way.

Negatives on algo change/adjust

• While more than likely not likely, if the ASIC is in fact a FPGA, could quickly be reprogrammed (highly unlikely due to cost, which would be transparent on initial sales of Batch 1 and 2 pricing)
• More work for Ethereum testers, developers as they now have to prep a fix (even if fast, quick tweak, still work); deploy to testnet, solicit support to validate change doesn't cause an issue
• All mining software would need to be updated, means folks like ethermine, claymore etc will have to be on point and have notional time to fix/test release; this would have to be coordinated
• Unknown businesses and financial institutions that funded potential off radar ASIC development and other known companies that have put significant investment in development will be directly affected.

In closing, hopefully this helps augment the already vibrant discussion on the subject. I have no doubt it will. Cheers