ProgPow could generate a fork for Ethereum and Hudson Jameson‘s concerns led him to write a very articulate post on the subject.
I just published "ProgPoW: The Ethereum Community Speaks".
It provides a historical timeline of ProgPoW decision making, a pros/cons list, and my personal opinion on #ProgPoWhttps://t.co/QPmktjHVX3 pic.twitter.com/pUktWtoreX
— Hudson Jameson (@hudsonjameson) March 2, 2020
Some of the players involved may have a speculative interest in splitting the chain.
With the expanding DeFi world and the need to enhance the industry, what would be generated by such an event would not provide good marketing for adoption.
Jameson is the community manager of the Ethereum Foundation, a strong voice in the community which in this particular case points out:
“I am speaking on behalf of myself, Hudson Jameson, and not on behalf of the Ethereum Foundation or any other entity.”
After explaining the decision-making process that led to the inclusion of ProgPow in the next Ethereum systemic upgrades, Jameson does not take sides against the proposal itself, but points out that the topic has not been sufficiently discussed and digested at present.
The misunderstandings about changing the algorithm and the risks of speculative manipulation of information is too high. His speech can be summed up in a few lines taken from his statement:
“With the prominence and money involved in DeFi and other on-chain protocols, it would not be in the interest of anyone to support an Ethereum fork long term over a contentious algorithm update that is primarily rallied against because the community was not properly informed or heard. However, this is still not ideal in any way! I don’t want a fork”.
Despite his great skills, the approach taken in the statement by the community manager doesn’t appeal to everyone.
Some people wonder if the fear related to the amount of tokens stuck in DeFi is becoming a dangerous worry when faced with the need to make difficult choices about the network.
It is basically through them that protocol governance is expressed.
According to the author of the post, Ethereum miners are not a threat at the moment, their collaboration and commitment to ETH demonstrate a low propensity to attack.
Becoming ASIC-resistance does not seem to be so important in view of Ethereum 2.0, especially if becoming it jeopardizes the community’s resilience.
Why does Ethereum want to be ASIC-resistance?
The algorithms behind the PoW determine how the network consensually adds a block to its chain.
Typically, for this to happen, it takes computing power to solve a mathematical calculation.
This calculation was initially handled by the processors of our normal home computers, now it is solved in large mining farms around the planet.
As the business has grown, equipment specialization has reached levels of performance capable of making the production of mining equipment a separate industry.
This sector produces dedicated hardware that is able to guarantee maximum efficiency in the management of the algorithm with the exclusion of any other use of the purchased component.
These devices are called ASICs: “Application-Specific Integrated Circuit”.
Experience shows that, as has been seen on the Bitcoin network, the process tends to generate power centralization, which results in direct control over the network and concerns the protocol developers.
Note that the famous hashing power heavily affects a protocol or its systemic update.
Becoming ASIC-resistance is a way to express the concept whereby the algorithms that provide security structure in blockchains must not allow for easy development of specialized equipment.
Hardware vs Software: who is right?
While on the one hand there is the world of developers who would like to involve only the community of protocol designers and not have to deal with the mining community, on the other, there is an industry and new emerging interests who do not like to see their investment threatened by those who only deal with software and do not run any entrepreneurial danger related to mining and transaction validation in blockchains.
This ideological clash should not be underestimated, this is a game that is linked to the economic theories behind the birth of the blockchain. Satoshi Nakamoto has envisioned a system for which the natural tendency to maximize one’s own interest is the basis for securing the system.
He imagined a future in which large companies would secure the network through hundreds of devices.
That said, reality is less ideal and brings with it many problems. The advantage accumulated by some actors in the ecosystem risks monopolizing the network, thus undermining the preconditions of decentralization embedded in the project.
In order to limit the ability of the players involved to dominate the very important mining industry, the algorithms change and the problem that needs to be solved in order to validate a block and add it to the chain, thus securing the cryptocurrency reward, evolves.
Here are some of the most popular algorithms and the ability of dedicated hardware to improve efficiency compared to the GPU or CPU hardware available in traditional markets.
Existing algorithms with relative efficiency in ASIC development:
- SHA256 Potential ASIC efficiency gain ~ 1000X;
- Scrypt and NeoScrypt Potential ASIC efficiency gain ~ 1000X;
- X11 and X16R Potential ASIC efficiency gain ~ 1000X;
- Equihash Potential ASIC efficiency gain ~ 100X;
- Cuckoo Cycle Potential ASIC efficiency gain ~ 100X;
- CryptoNight Potential ASIC efficiency gain ~ 50X;
- Ethash Potential ASIC efficiency gain ~ 2X;
What is ProgPow?
ProgPow is an algorithm designed for the Ethereum network that should support the project until the Ethereum 2.0 Proof of Stake is ready and migration is complete.
The goal in designing ProgPoW is to match the requirements of the algorithm to what is already present in commercial GPU graphics cards: if the algorithm were to be implemented on a custom ASIC, there should be fewer opportunities for efficiency gains compared to a commercial GPU.
This creates a disadvantage for ASIC developers in favour of companies like Nvidia & co. which already have many products on the shelf and do not relate to the monopoly issues described above.
The question remains: will it be fair to give an advantage to traditional graphics card manufacturers rather than emerging ASIC manufacturers just for fear that their niche market will not outrun monopoly dynamics?