116 views
0

WHY THIS MATTERS IN BRIEF

The more centralised the mining of an individual cryptocurrency becomes, especially if it leverages new, more powerful technology, the greater the impact on a cryptocurrencies value.

 

Rumors of a new ASIC mining  rig from Bitmain have driven Ethereum prices well below their one week high of $585. An ASIC, or Application Specific Integrated Circuit, in the cryptocurrency world is a chip that designers create for the specific purpose of mining a single currency. Early Bitcoin ASICs, for example, drove adoption up and then, in some eyes, centralised Bitcoin mining in a few hands, thereby thwarting the decentralised ethos of die hard cryptocurrency fans.

 

RELATED
North Americas first Tidal energy turbine goes online in Nova Scotia

 

According to a CNBC report, analyst Christopher Rolland visited China where he unearthed rumours of a new ASIC chip dedicated to Ethereum mining.

“During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC for mining Ethereum, and is readying the supply chain for shipments in 2Q18,” analyst Christopher Rolland wrote in a note to clients Monday, “while Bitmain is likely to be the largest ASIC vendor, with currently 70-80% of Bitcoin mining ASICs, and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development.”

Historically users have mined Ethereum using GPUs which, in turn, led to the unavailability of GPUs for gaming and graphics. However, an ASIC would change the mining equation entirely, resulting in a certain amount of centralisation as big players, including Bitmain, created higher barrier to entry for casual miners.

 

RELATED
Futurist keynote, London: Building Disruptive Organisations, Clearvision BBQ in the Clouds

 

“Ethereum is of the most profitable coins available for GPU mining,” said Mikhail Avady, founder of TryMining.com, “it’s going to affect a lot of the market. Without understanding the hash power of these Bitmain machines we can’t tell if it will make GPUs obsolete or not. It can be seen as an attack on the network. It’s a centralization problem.”

Avady points out that there is a constant debate among cryptocurrency aficionados regarding ASICs and their effect on the market. Some are expecting a move to more mineable coins including Monero and ZCash.

“What would be bad is if there was only one Ethereum ASIC manufacturer,” he said, “but with Samsung and a couple other players getting into the game it won’t be bad for long.”

 

RELATED
Apples CEO Tim Cook speaks out the future of AI

 

There is also concern over ICO launches and actual utility of Ethereum based smart contract tokens.

“The price of ETH is becoming consolidated as people become more realistic about blockchain technology,” said Sky Guo, CEO of Cypherium, “people are looking for higher quality blockchain projects. I believe a rebound in ETH’s price will come soon as panic surrounding regulations begins to fade.”

About author

Matthew Griffin

Matthew Griffin, award winning Futurist and Founder of the 311 Institute, a global futures think tank, is described as "The Adviser behind the Advisers." Regularly featured on AP, CNBC, Discovery and RT, his ability to identify and track hundreds of game changing emerging technologies, and explain their impact on global culture, industry and society, is unparalleled. Recognised for the past five years running as one of the world's foremost futurists, innovation and strategy experts Matthew is an international speaker who helps governments investors, multi-nationals and regulators around the world envision, build and lead an inclusive future. A rare talent Matthew sits on the Technology and Innovation Committee (TIAC) for Centrica, one of Europe’s largest energy companies, and his recent work includes mentoring XPRIZE teams, building the first generation of biocomputers, helping the world’s largest manufacturers companies envision the next five generations of smartphones and devices, and what comes next, and helping companies including Qualcomm envision the next twenty years of semiconductors. Matthew's clients are the who’s who of industry and include Accenture, Bain & Co, BOA, Blackrock, Bloomberg, Booz Allen Hamilton, BCG, Bentley, Dell EMC, Dentons, Deloitte, Deutsche Bank, Du Pont, E&Y, Fidelity, Goldman Sachs, HPE, Huawei, JPMorgan Chase, KPMG, Lloyds Banking Group, McKinsey, Monsanto, PWC, Qualcomm, Rolls Royce, SAP, Samsung, Schroeder's, Sequoia Capital, Sopra Steria, UBS, the UK's HM Treasury, the USAF and many others.

Your email address will not be published. Required fields are marked *