Obelisk, a new ASIC manufacturer led by Siacoin developer David Vorick, has released plans for an ASIC launchpad for Proof of Work coins. Its aim is to provide new and existing cryptocurrencies with an ASIC-friendly algorithm that will mitigate the rising threat of 51% attacks. Although initially devised with the company’s own ASIC miner in mind, an open source design will allow other ASIC developers to release their own compatible units.
Obelisk Proposes a More Open ASIC Algorithm
New ASIC manufacturer Obelisk has shown a knack for releasing pronouncements that set tongues wagging within the industry. Founder David Vorick’s hard-hitting manifesto The State of Cryptocurrency Mining went viral last month, and the company has followed this with news of a launchpad for ASIC-friendly coins. Obelisk plans to partner with coin developers to devise an algorithm that ought to reduce the risk of 51% attacks. In the past month, Verge, Monacoin, Bitcoin Gold, and Zencash have all been hit with huge amounts of rented hashpower and double spend transactions forced through.
There are drawbacks to this proposal though as Obelisk concedes: “This does mean that at launch, the coin is centralized around a single ASIC manufacturer…An Obelisk Launchpad release will include open source chip design schematics that can be leveraged by competing companies to bring their own ASICs to market.” The upside to coin teams partnering with Obelisk is the added security that comes from knowing who controls the hashrate. The company explains:
The algorithm is not disclosed to the public until the ASICs are completed, meaning there is no chance that another group is able to be first to market. This gives the coin developers control over the launch of their coin. ASICs can be distributed throughout the community, and we can ensure that no party controls more than a certain percentage of the hashrate, nor has any capacity to commit abuse. From genesis, the coin is protected by powerful community owned ASICs.
Mining Centralization: The Lesser of Two Evils?
Interest in cryptocurrency mining had been waning up until April, as rising hashrates forced more hobbyists out of the game and new coins moved to Proof of Stake. That has all changed in the last couple of months, however, as a string of 51% attacks has piqued interest in mining once more and propelled the industry to the forefront of the cryptocurrency news cycle. On the one hand, there are those who believe that the centralization of mining, led by the dominant Bitmain, is a dangerous trend. But on the other hand, there are those who believe that mining centralization is a small price to pay for avoiding 51% attacks.
Generally speaking, coins which are equipped with ASIC-friendly algorithms are less prone to being hit with 51% attacks that can be perpetrated with rented hashpower. The flipside is that these coins can be plundered by huge pools of ASIC miners, squeezing out the community of smaller miners that have formed around a particular coin, and granting the lion’s share of the mining rewards to a privileged few.
Leading industry figures have spoken in strong terms of the need to combat further mining attacks, with Zcash founder Zooko stating that “defending against them is an urgent and critical job.” Should Obelisk’s ASIC launchpad prove successful, it, together with the emergence of GMO’s new miners, suggests a sliver of hope that Bitmain’s stranglehold of the industry could eventually loosen.