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Cryptocurrency

Analysis Indicate that 85% of Monero Network is Controlled by ASICs

According to an analysis on Medium by a user called MoneroCrusher, it is revealed that cryptocurrency Monero (XMR) seems to be controlled by the ASIC mining. This information is based on data collected from the past forty days. Reportedly, the author indicated that 85.2% of the Monero network is being mined via ASICs.

ASICs (Application Specific Integrated Circuits) are a type of non-standard integrated circuits (ICs) that are custom designed for single specific use, in this case, for mining the cryptocurrency. ASICs are very powerful by providing higher hashrates and are electricity efficient compared to the standard CPUs and GPUs. But because they can only be used for one application, ASICs are usually expensive to design and produce. Mining via ASIC gives a much better advantage to the miner and eventually cause GPU mining to become unprofitable. Hence, it creates an environment where only people who are ready to make huge investments into such specialized hardware will be able to thrive.

“The entire point of cryptocurrency is decentralization – away from governments, rich people, you name it – anyone with a computer can be a node,” explains a Reddit user.

“ASIC’s completely undermine that, and as soon as any one group gets their hands on enough of them, it will ruin the currency.”

Monero had hard-forked and enforced a new mining algorithm to counter ASICs back in April 2018 when it detected that the project was being dominated by the ASICs. At that time the hashrate dropped dramatically from 1030 Megahashes per second down to 158 Megahashes per second. Within days, the network stabilized. The Medium analysis found a similar unusual pattern once again recently.

Monero is an open-source cryptocurrency created in April of 2014 that focuses on fungibility, privacy, and decentralization. Monero uses an obfuscated public ledger, meaning anybody within the system can send or receive transaction no one from outside can see the source or amount of transactions.

The expansion of ASICs into a Monero network is a disturbing trend because it increases centralization on a network and in such a situation, exploiting the system for personal gains becomes very easy. Monero has been seriously combating the ASICs and has an active forum where the group crowdsources ideas for resisting ASIC. Though Monero remains an open source project, the community needs to take stand on this by opting for another hard fork with a new mining algorithm or accepting ASICs domination of the Monero network.

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David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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