Analyzing If Siacoin (SC) Can Outpace ASIC Mining Chip Hardware Manufacturers

Can Siacoin Outrun ASIC Manufacturers?

Bitmain’s Jihan Wu is facing backlash for his platform’s production of inexpensive, industrial-grade chips that have negatively impacted the mining game. Recently, Siacoin, an online network for distributed storage, announced that it will provide a protocol upgrade to “brick Bitmain’s” and Innosilicon hardware that are threatening to dominate Sia mining.

The release of Siacoin’s ASICs will allow mining to be dominated by several deep-pocketed players was considered a “direct attack on the community,” according to David Vorick, a lead Sia developer.

Siacoin is not wholly hostile toward ASICs. A community-led effort was able to raise several million dollars to finance development by Nebulous, which is Siacoin’s parent company. And after a year of development, Obelisk SC1 launched this summer.

Before Obelisk, Bitmain launched its own ASIC hardware, and Innosilicon came there after.

Concerning Bitmain’s release, Vorick wrote,

“The first one, Bitmain, did not announce their product until 10 days before shipping, effectively disrupting a multi-million dollar project from the community without warning and nearly causing a civil war.”

As for Bitamin’s ASIC, it led to a bitter fight within Siacoin and some even demanded for a hard fork. This isn’t the first crypto platform to blacklist Bitmain. This year, Monero developers announced a hard fork after Bitmain announced its first CryptoNote ASIC device and that it expects future algorithm changes to prevent ASIC development. Many Ethereum developers are also arguing about the issue.

ASICs have become an issue for lower-cap crypto as well. Even though GPU mining is known for being a democratic, but less professional hardware, it has weakened the network to 51 percent attacks. And Several ASIC-resistant currencies, such as Bitcoin Gold and Verge, have experienced double-spending attacks.

Siacoin isn’t blacklisting ASICs altogether. According to Vorick,

“ASIC manufacturer monopoly is preferable to being a GPU mined coin. We believe that embracing an ASIC monopoly is better than resisting ASICs altogether.”

He added that, toe secure a temporary monopoly against unethical ASIC producers,

“Obelisk miners provided a clever trap door. Essentially, “bake2b is a circuit”. We added just a tiny extension in a clever place that you wouldn’t just naively think to add that extension.”

The extension allows Obelisk machines to continue working after the hard fork, and this gives Nebulous a three to four month head start against competing miners. Vorick concluded,

“As long as the new manufacturer is contributing to the health of the Sia mining ecosystem and avoiding abusive practices, the seat of power will be passed along gracefully. And in the event that we need to brick another manufacturer in the short term, Obelisk has a chip design prepared that we can tape-out and use to defend the network.”