At this point, anyone with a passing interest in cryptocurrency is aware of Ethereum (ETH). Easily the number two cryptocurrency by market cap, Ethereum is the platform of choice for smart contracts and decentralized applications alike. Their ERC20 token standard is the gold standard for altcoins, and their other token standards are in use across the crypto-sphere for varied applications. Although the situation has cooled over the first quarter of 2018, Ethereum is suffering from a problem. They maintain a Proof of Work (PoW) algorithm that uses miners to validate transactions, similar to how Bitcoin manages their blockchain.
Unfortunately, that system can create traffic slowdowns and high fees when trading volume is particularly high. The Ethereum Foundation, the development team behind the project, has proposed hard forking into a Proof of Stake algorithm to combat this. Proof of Stake would remove the mining subsystem and replace it with trusted master-nodes. The community is torn about the hard fork, but new information is making the change an absolute necessity.
Bitmain and the ASIC Antminer E3
Bitmain is a notorious name in the cryptocurrency world. They account for much of the custom-built hardware for blockchain mining, both for their own uses and for export to third party miners. Their application-specific integrated circuit (ASIC) mining rigs are purpose built solely to mine specific cryptocurrencies. As they are built from the ground up for that purpose, they are very efficient – giving Bitmain a somewhat disturbing amount of power over any blockchain they set their sights on.
The next generation of Bitmain’s mining rig is set to release soon. The Antminer E3 will exponentially increase the ability to mine Ethereum and force smaller miners out of the game entirely. This fact, coupled with the somewhat unscrupulous business practices of Bitmain, has much of the Ethereum community clamoring for a hard fork solely to disable the Antminer E3. They argue that the longer the Ethereum Foundation waits to hard fork, the more control Bitmain will have over the blockchain.
Arguments Against a Temporary Hard Fork
Vitalik Buterin, co-founder of Ethereum and the face of the cryptocurrency, has not discounted the idea of a temporary hard fork. As always, he is willing to listen to the concerns of the community – but he is on record as saying he doesn’t believe it is necessary. As Ethereum will be switching over to a Proof of Stake algorithm in the near future, he believes that a temporary hard fork only distracts from that ultimate goal.
Both arguments are valid, and it remains to be seen what the Ethereum community decides to do. Should a hard fork be performed, Bitmain’s Antminer E3 will become instantly obsolete. The highly specific nature of the hardware would not be able to function on the new algorithm. However, a temporary hard fork would only change the algorithm – not replace it with a Proof of Stake model. As such, Bitmain would fully be able to develop an Antminer E4 for the new system. Until Ethereum transfers away from miners entirely, Bitmain and their ilk will continue to do everything in their power to game the system and profit at all costs.
Article By Adam Stone