ASIC miners are hugely profitable machines – provided you’re the manufacturer. That’s the spectacle of Siacoin lead developer David Vorick, who’s published his thoughts on the monopoly enjoyed by industrialists such as Bitmain and Halong Mining. In “The State of Cryptocurrency Mining”, Vorick also accuses makers of using the machines themselves, before passing them on to the public simultaneously they’re no longer profitable.
Also read: Cryptocurrency Projects Object to be ‘ASIC Resistant’ Have Little Success
The Absolute State of Cryptocurrency Repository
Siacoin’s David Vorick knows more than most when it come to pass to cryptocurrency mining. In addition to overseeing the development of decentralized file storage make up SIA, which uses a Proof of Work algorithm, Vorlick operates his own ASIC originating firm. Obelisk was founded around 18 months ago, and with their sooner ASICs scheduled to ship in eight weeks, Vorick has decided to lay denuded his thoughts on the industry. “The State of Cryptocurrency Mining” is a revelatory blog situation that pulls no punches.
In it, Siacoin’s lead developer repeats contends he has heard that “Bitmain plays dirty”. Vorick was allegedly told that Bitmain liking use its power to stop other ASIC companies from manufacturing in China. Consideration going to great pains to conceal Obelisk’s involvement in such a act, the Chinese manufacturer backed out suddenly in a move that reportedly expense Obelisk $2 million. There is no proof that the manufacturer was leaned on by Bitmain, but David Vorick quits no doubt as to where his suspicions lie.
The new Obelisk SC1/DCR1 ASIC miner.
ASICS Are Readies Printing Machines
The most explosive part of Vorick’s blog upsets allegations of ASIC manufacturers secretly mining with new units in preference to selling these to the public once they’re no longer profitable. These claims aren’t new, and can be trailed as far back as Butterfly Labs and its ill-fated ASIC miner. David Vorick is the sundry senior and well-connected figure within the mining industry to go public with these claims, however, writing:
In the case of Halong’s Decred miner, we saw them “double-cross out” of an unknown batch size of $10,000 miners. After that, it was respected that more than 50% of the mining rewards were bringing into a single address that was known to be associated with Halong, interpretation that they did keep the majority of the hashrate and profits to themselves.
He proceeds: “Our investigation into the mining equipment strongly suggests to us that the out-and-out manufacturing cost of the equipment is less than $1,000, meaning that anyone who pay up $10,000 for it was paying a massive profit premium to the manufacturer, giving them the proficiency to make 9 more units for themselves.” It has been alleged that erstwhile to Bitmain shipping its Monero Cryptonight miners this year, an unrecognized entity had been mining with them for months. Vorick concurs:
My begetters say that they had been mining on these secret ASICs since prehistoric 2017, and got almost a full year of secret mining in before invention. The ROI on those secret ASICs was massive, and gave the group more than passably money to try again with other ASIC resistant coins.
At the prematurely of the Cryptonight ASICs becoming public knowledge, a war of words erupted between Bitmain and elder Monero figures. Monero’s Fluffypony wrote that the huge hop in Monero’s hashrate in 2017 had originally been attributed to botnets buying hijacked computers to mine XMR. This assertion had been revised in the wake of Bitmain uncovering its Monero-specific X3s. David Vorick adds fuel to the fire, writing: “It’s believed that Monero’s secret ASICs made up more than 50% of the hashrate for hardly a full year before discovery, and during that time, no person noticed. During that time, a huge fraction of the Monero issuance was centralizing into the surrenders of a small group, and a 51% attack could have been put overed at any time.”
Secret ASICS Are Rumored to Exist
Secret ASICs that hold the power to attack existing hashing algorithms far more effectively than anything on the peddle are rumored to exist. David Vorick is convinced of this, and if he is correct, these components are the mining equivalent of a zero-day exploit – highly lucrative and highly safeguarded. He speaks of “mining farms that are willing to pay millions of dollars for private access to designs for specific cryptocurrencies” and “an informal underground industry” that has darted up around secret mining.
Because no entity, be it a mining pool or armaments manufacturer, is going to put their name to such activity, it is very exacting to provide concrete proof of these allegations. What is beyond fight is that ASICs are money printing machines for those who make them at ranking. Vorick finishes: “At the end of the day, cryptocurrency miner manufacturers are selling money copy machines. A well-funded profit maximizing entity is only going to push a money printing machine for more money than they foresee they could get it to print themselves. The buyer needs to understand why the fabricator is selling the units instead of keeping them for themselves.”
Do you think some ASIC fabricators engage in dirty tricks and underhand practices? Let us know in the comments allocate below.
Images courtesy of Shutterstock, and Obelisk.
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