Earlier this month on April 6th, the Ethereum development community proposed EIP958, which was a hard fork proposal to battle against the new ASIC GPUs produced by Bitmain. According to Ethereum Co-Founder, Vitalik Buterin, the ASICs don’t pose a threat to Ethereum currently and all development focus should be geared towards the production of Casper, Ethereum’s Proof of Stake implementation.
This is not Bitcoin; the miners are not in control here. If there comes a day where Bitmain has majority hash power and tries to use it for evil, then we will speed up Casper development and to hell with any remaining bugs. We can try really hard to release it within a week and mining rewards go down by 90%. Vitalik Buterin
The main worry behind the new ASICs GPUs is that a large chunk of miners can control the Ethereum chain and launch a 51% attack on the network. The current E3 ASICs miners are producing the following metrics compared to other GPUs.
The New Bitmain ASICs E3 Miner vs Traditional GPUs
Chart Data from: https://cryptoslate.com/bitmain-e3-asic-ethereum-miner/
As we can see in the chart above, the new ASIC miner dominates all other competing GPUs. This can be a problem for both NVIDIA & AMD, as they’ll begin to see their GPUs get pushed out of the market if more and more E3 miners come online. But, what does this mean for Ethereum? As we’ve seen with the bitcoin network, ASIC miners control about 38% (https://blockchain.info/pools) of the bitcoin mining network, which starts to centralize the network into the hands of the miners.
51% Network Attack On The Ethereum Chain
With the introduction of these new E3 miners, the network could potentially see a 51% attack if all mining is controlled by these new chips. According to Vitalik Buterin, if this were ever the case, then the development of Casper Proof-of-Stake would be released within a week, bugs included, to help combat the attack. A Rapid switch to the proof-of-stake protocol will drop mining rewards by 90% and make the ASIC obsolete. Based on the overall conversations on social media, the community is not in favour of the new ASIC and is calling for a hard fork. However, core developers are continuously pointing out that these new chips are not a threat as of yet and their focus should be on the development of Casper.
When can we expect the Casper Proof-of-Stake protocol to finally launch on the network? It’s currently unclear and previous predictions have already missed their deadlines. When we first wrote about the Casper PoS protocol, the expectations were for January 2018. However, with most development projects and implementations, deadlines are often missed. All we can do is track the development progress and wait for updates from the core developers.
The new ASIC chips by Bitmain are very powerful compared to the leading Ethereum mining GPUs by Nvidia & AMD. The prevention of ASICs mining through a hard fork can prove to be a vital upgrade for the Ethereum network. Although, at this point, the developers, along with Ethereum’s co-founder, Vitalik Buterin, believe that it is not a threat. Even still, if the network begins to centralize with these miners, then Casper implementation would have to happen even sooner.
Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.