An Ethereum Improvement Proposal (EIP) to discuss whether the community should modify its Ethash mining algorithm to maintain ASIC resistance was opened by an Ethereum developer these week.
EIP 958, posted on GitHub by Ethereum core developer Piper Merriam, formally proposes that improved ASIC resistance be implemented into the network’s instance of Ethash, a Proof-of-Work (PoW) consensus algorithm.
“I believe it is the accepted wisdom that ASIC based mining leads to increases [in] centralization when compared to GPU mining,” Merriam wrote.
The EIP is a direct response to reports that Bitmain — by far the largest manufacturer of mining rigs that use Application Specific Integrated Circuit (ASIC) chips — has developed an Ethash ASIC miner and will begin shipping them within the next several months.
As their name suggests, ASICs are built to accomplish a specific purpose, which allows them to maximize efficiency for a single application rather than general-purpose use like CPUs and the more powerful GPUs.
Bitmain and other manufacturers have already built ASICs for a variety of mining algorithms — including the SHA-256 algorithm used by Bitcoin — but other cryptocurrencies have attempted to use PoW algorithms that are ASIC-resistant.
However, the Chinese firm, which is rumored to have raked in a $4 billion profit last year, has gradually developed ASICs even for algorithms that are less-widely used.
Since the ASIC market is dominated by Bitmain, many people fear that the development of Ethash ASIC miners will centralize Ethereum’s hashpower and give Bitmain outsized influence — influence it may not wield for the good of the community.
Until now, Ethash had been ASIC-resistant, allowing Ethereum and other similar cryptocurrencies to be mined using the general purpose GPU chips commonly found in gaming computers.
As the leaders in what is effectively a GPU manufacturing duopoly, Nvidia and AMD each benefited greatly from last year’s cryptocurrency price boom, which had a correlative effect on mining. In fact, many investors treated these two companies as “proxy stocks” for the cryptocurrency industry.
While the release of an Ethereum ASIC miner may not cause mining-related demand for GPUs to evaporate — Monero, for instance, has promised to alter its mining algorithm regularly to maintain ASIC-resistance — it could have a noticeable effect on AMD’s revenue in particular.
These fears are not isolated to the Ethereum community. Monero, for instance, has committed to modifying its instance of the Cryptonight mining algorithm every six months to make it unprofitable to produce a Monero ASIC miner.
An informal poll conducted by Ethereum developer Vlad Zamfir suggested that the majority of the 6,903 respondents would hypothetically support a fork to maintain ASIC resistance, while just 13 percent expressed explicit disapproval of the idea.
Merriam has also requested that EIP 958 be added to the agenda for next week’s Ethereum core developer meeting, which is scheduled for April 6 at 14:00 UTC and will be streamed on YouTube.