Battle of the Monero Hardforks

Apr 19, 2018   |   by Marvin Ordonez   |   Current Events

Application Specific Integrated Circuits (ASIC) have been a controversial topic in the crypto community. ASICs are chips that are optimized to run a specific series of computations and nothing else. This high optimization has made them attractive to miners since they can achieve higher hash rates than GPUs or CPUs can. Therefore, miners using ASICs get rewarded more often for securing the network. However, ASICs tend to be very expensive and users are worried that this can lead to mining centralization where a small portion of miners control a large portion of the hash power. Others argue that ASICs are good for a cryptocurrency because they are not versatile. This makes it so that a miner who uses ASICs for a certain coin acts in the best interest of that coin to protect his investment. Last week we saw how controversial this debate is when Monero had a hard fork to change Cryptonight, the proof-of-work algorithm it uses to secure its blockchain, in response to the news that several ASIC manufacturers had recently developed an ASIC model for Cryptonight. Four new Monero chains were created as a result of the hardfork. All claiming to be the original Monero.

There are now two projects claiming the same name, Monero Classic, that have dedicated themselves to developing the Monero code before the fork. One of these believes that miner centralization is less dangerous than developer centralization. “The Monero developers are saying that they can and will change the consensus rules whenever it suits them and the community seems to be conditioned into following the wishes of the developers”. Monero0 agrees with this sentiment and states that “We’ve decided that the Monero Project’s strategy to continuously hard fork is no longer a stable or a sane strategy.... The so-called “network upgrades” that are centrally mandated by the Monero Project are a trojan horse designed to compromise the effectiveness of Proof-of-work in the Monero Network.”

The other Monero Classic believes that ASICs protect Monero from the botnet issues it recently had and that both anti and pro ASIC chains should continue because of the pros and cons unique to each. Likewise, Monero Original (XMO) agrees with this sentiment and states that “Monero has always been about freedom of choice”. Finally, Monero V is another Monero project and they intend to hard fork from Monero in late April. Although, their strategy is to implement features that Monero does not currently have (like a finite number of coins) and is not centered around ASIC resistance.

Hard forks are interesting because it is how control over a cryptocurrency gets decentralized. A group of developers who no longer like how a cryptocurrency is being developed can choose to hard fork from the original cryptocurrency. At the time of the fork, both blockchains have the exact same history, but immediately after the fork is when blocks added to the blockchains are no longer the same. This makes it so that the developers who decided to fork can develop the cryptocurrency how they see best without interfering with the development of the original. The nice thing about this is that investors in the original project get the same amount, or more, of coins on the new fork. The issue though is that it becomes difficult for new investors to decide which project to invest in. The more difficult the decision, the less likely an investor is to dedicate time and energy to it. However, this does not take away from the useful impact that hard forks have had in the community. After all, the current Monero Core Team forked from the very first Monero back in 2014.

As for the ASIC debate, I agree with Vitalik’s statement that “No proof-of-work algorithm can be ASIC resistant forever” and that resources are best spent on developing other aspects of a cryptocurrency. If a group of developers is really dedicated to distributing the security of the network over thousands or millions of individuals than they should be focusing on other security measures like proof-of-stake, proof-of-burn, or the many other alternatives being created to address this issue.

Follow us on Twitter for more interesting cryptocurrency articles.

Marvin Ordonez