Bitcoin Network is virtually run by ASICs. Other mining devices like CPU, GPU and FPGA are in the minority, making up not even up to 15% of the global mining network due to the high hashing difficulty. These ASICs that are running the Bitcoin Network are predominantly from one manufacturer, Bitmain. The topmost mining pools, Antpool (ca. 15 %), BTC.com (ca. 30%) and ViaBTC (ca. 10%), including other minority pools with 5-7%, all have direct and/or indirect ties to the same ASIC manufacturer Bitmain. Blockchain developers have expressed deep concerns about this fact and have raised the question of whether Bitcoin network is truly decentralized and immune to 51 % attack and interfered price manipulations.
The obvious is the answer to the concerns of cryptocurrency developers. Bitcoin network is centralized around Bitmain’s mining hardware (>60%) and pools (>60%). There is no guarantee whatsoever that an entity controlling a blockchain network cannot undermine the global interest of its network users or allow itself to be used as a platform for network attacks. This was highlighted in Bitcoin’s whitepaper by Satoshi Nakamoto, and therefore it was already known that such a scenario could play out if decency and satisfaction escape the minds of peers. Apparently blockchain developers have recently been awakened by what is perceived as an imminent threat to the ecosystem due to expansion of ASIC hardware innovation, led mainly by Bitmain, into all the famous algorithms upon which blockchains are built.
As a result, unfriendly algorithms to ASICs were created, and major cryptocurrency codes have been changed or in the process of been changed in order to ban ASICs from blockchain networks. Different ASICs have been developed by different major manufacturers, not only Bitmain but also the likes of Baikal for more than twelve different cryptocurrency algorithms but they continue to face outcry for ban by the major pioneering developers and founders of blockchain technology. Bitmain helplessly screamed out loud when it became obvious that its newly manufactured ASIC for Monero cryptonight algorithm has been retargeted by Monero developers for code-changing, and was later forked. The implication was that Bitmain’s hoped market returns based on calculations from the sale of that ASIC were dashed. Shortly afterwards, Bitmain announced the sales of new ASICs developed for equihash algorithm which is powering Zencash and Bitcoin Gold. Both blockchains which are more GPU oriented aimed at code-changing and forking to eliminate any use of ASICs. However, and very recently both cryptocurrencies have reportedly suffered a network attack after their plan to eliminate ASICs. This attack on Zencash and Bitcoin Gold is alleged to have been orchestrated by Bitmain network itself, but could also have originated from sympathizers of Bitmain or could be a ‘false flag’ attack by Bitmain competitors in ASIC manufacturing. Obviously, there is now manifest bitterness in the ecosystem between software (blockchain algorithm) developers and hardware developers (e.g Bitmain).
While the fundamental points of conflict between cryptocurrency developers and ASIC manufacturers are very alarming and concerning, ASICs can still be supported because they are novel in parallel computing, and are an advancement in computation technology. From hardware engineering point of view, Bitmain succeeded on an innovation path that was not conceived to be possible some years back. ASIC machines have other advanced applications apart from using them to mine cryptocurrency. On one hand, Bitmain should be encouraged to focus more in furthering the development of ASICs, like they have currently supported the creation of a new Algorithm, Tensority, that bridges cryptocurrency mining with Artificial Intelligence. This is a new Proof-of-Work consensus algorithm, where matrix and tensor operations are used in the hashing process. ASICs from Bitmain still suffer from loud noise, short-term warranty and numerous other technical challenges that require users to ship back the machines for repair. Bitmain can focus on improving and tidying up these shortcomings. Two to three years warranty is not asking for too much from the millions of ASIC users. Making the machine noiseless without add-ons should be researched and executed by Bitmain. Efforts geared towards other uses including for home applications should be a focus of Bitmain. Active recycling of old ASIC miners should be a new priority for Bitmain and other manufacturers. ASICs are now becoming a critical waste issue whenever new better-performing versions are built and also after lifetime of a cryptocurrency mineability.
On the other hand, Bitmain should be discouraged from producing ASIC for specific algorithms without an initial active discussion with the community developers and users of coins based on those algorithms. Such an active collaboration between hardware manufacturers and software producers will be very positive for growth and use of blockchain technology in general.
Let us be categorical with this question and its answer: Is there a possibility of 51% attack on Bitcoin? Of course! This can be effectively carried out if desired either by a manufacturer of ASICs like Bitmain or by mining farms. If Bitmain has integrated backdoors in the miners, it will easily conduct any form of attack on Bitcoin Blockchain, any form! The possibility of such a backdoor cannot be ruled out, intentional or unintentional, as today we are still unravelling backdoors/flaws in our computer hardware electronics, including the trusted reclusive chips.
Mining farms are also potential attackers. It is highly possible that owners of mining farms could find companionship and network themselves to conduct an attack while pinning it on Bitmain. One can imagine the idea of mining farms where tens to thousands of ASICs are used for mining cryptocurrencies. To the owners, this is advantageous but it is problematic and destabilizing to the larger blockchain community and the ecosystem in general. With these mining farms, large amount of cryptocurrencies is generated from one source and could be used to create exponential volatility in price. Multiple ASICs running from one node, from same location, from same town, from one country alone, is already an attack on decentralization, consensus, governance and blockchain network in general. Core developers frowned at centralization for currency developed to be decentralized.
It is true that Bitmain sees itself as having succeeded in an innovation and definitely want to stay at the top among their manufacturing peers. Yes, credit should be given to Bitmain for its innovations in ASIC. As a manufacturer, Bitmain asks itself this question: “if we don’t manufacture ASIC for this Algorithm, what if our competing peers do it?”. Blockchain developers need to equally understand this logic in the mind of Bitmain.
What are the ways forward? First and foremost, bitterness in the young ecosystem is unhealthy for everyone. Secondly, any form of politics, regional and national interests must be removed from the blockchain ecosystem. Bitmain is Chinese based manufacturer, and therefore it cannot be ruled out that issues between Chinese and Western nations are playing roles in this fracas. Thirdly, both hardware and software developers must learn to have discussion, very transparently, and should ask the question about where we will be in the next ten years with the ‘bitterness’ that is already creeping into the young ecosystem. Lastly, it is true that Bitmain has earned a reputation as an unhealthy competitor and a potential bad actor. However, all must see through the efforts of Bitmain to correct its past mistakes and hence, should be helped to achieve this through more open communications and thought-through advice.
The answer to the way-forward points to the need for an open and transparent dialogue between blockchain developers and ASIC manufacturers led by Bitmain.