For any of us that have either been in a guidance counselor’s office in their days at school, or attended any career advisors meeting, you’ll likely have one key skill etched into your mind: the skill that is regarded as one of the most valuable for success in the 21st century marketplace, Adaptability.
In the world of cryptocurrency mining, adaptability is certainly a word that can be put to use liberally, as companies attempt to one up their competitors with new, more innovative approaches to extracting crypto. This is particularly true with the manufacturing of specialized mining processors, as well as idle and custom circuitry.
While these would likely be jumped upon by an enthusiastic and competitive crypto mining space in 2017, these inventories litter shelves in light of the long winter that was 2018. While we would think that a spring would follow winter, there may very well be worse yet to come for the crypto mining industry.
It is worth giving pause for thought on the fact that cryptocurrency mining, which, as a very young industry, has evolved rapidly over the years.
Rapidly moving from being the past-time activity of small-scale miners in offices and bedrooms, to a massive production industry, one which has been overrun by international enterprises which make use of highly specialized mining rigs which are more broadly known as ASICs.
In some instances, in order to edge out some of their lingering competitors, and ensure a far better rate of odds in winning digital currency in a mining competition, respective mining projects will work to pour their resources into a singular pool, allowing for the creation of mega-conglomerates of mining companies, which is a genuinely terrifying prospect for crypto startups which are either directly (or indirectly) involved in the world of crypto mining.
Usually, this comes down to serious concerns with regards to security; with the concentration of mining power being placed into the hands of a small clique, there are very real dangers of that same pool being subject to some kind of take-over and cyberattacks like majority / 51 percent attacks.
It is often as a result of these concerns that startup projects go on to fight back against these monopolies by creating and launching algorithms which present resistance to ASIC mining hardware.
The emergence of ASICs has been a disruptive force within an already disruptive industry. It’s thanks to the efficiency of these ASICs that GPUs rapidly fell out of favour in the opinions of cryptocurrency miners out there, a population which used to make frequent use of them as the go-to medium for mining.
But while ASICs have the majority for the moment, there is a whole other new kind of adaptive, efficient technology that has been worked upon steadily and in secret. One that is able to provide a high level of efficiency compared to a relatively low level of cost.
The Field Programmable Gate Array (or FPGA for short) are effectively mining rigs that can be quickly programmed with a good deal of speed and ease. If there was ever a need for a dedicated mining network to spontaneously change the makeup of its algorithm, FPGA can make the changes needed.
While these have been around for some time, having hit the market back in 2012, these were older iterations which weren’t able to balance out the mixture of cost-effectiveness and efficiency. What we’re seeing more of now are its newer models, which have managed to fix this, as well as provide more free software which can help improve the efficiency going forward.
So what does this mean for crypto-miners in general? For one, it means that FPGA has the power to pull the initiative away from major companies, and take crypto mining back to its independent roots, at least that’s what it alleges to do.
FPGA – Is There an Off-Switch With This Technology?
Over the course of July, the CEO of Electroneum had a very interesting kind of mutiny on his hands. Specifically, Richard Ellis had to contend with a miner mutiny.
To provide some context: back in July, the mining community for Electroneum had managed to wrangle demands out of the blockchain solution. Specifically, these miners called on Electroneum to switch off ASIC mining, which made it challenging for GPU mining operations to make headway.
While this would have made it an open and close case, the same GPU miners refused to get back to work, stating that the level of hashing power needed in order to mine within the pool rendered it unprofitable for them to keep working. This resulted in some of the more stressful weeks of Electroneum’s life as its hash-power plummeted by 97 percent, with miners still refusing to get back to work.
Ells’ relief came in the shape of newly arrived FPGAs, and their potential to combat the level of hashing as well as ASIC resistance. This compelled him to finally give up on GPU Mining, re-introduce ASIC mining to the mining pool and become an overt advocate for FPGAs.
He went on to explain the rationale behind this new-found support, arguing that if any company decided to change its mining algorithm, all the miner would have to do is load a new program in order to get back to work.
“Your equipment stays the same but you change the effect. They’re very powerful, very cheap, they are the future of mining cryptocurrencies. Nobody will be able to switch them off.”
One of the other reasons why ASIC resistance is such a major topic is because smaller scale networks, like those that altcoins in the world have, are exceptionally vulnerable to attacks. Technavio, in its report on the hardware market of 2017, found that ASIC mining hardware came to dominate the vast majority of the market share, so there’s a lot of validity to the concerns.
While FPGAs don’t have the same level of efficiency as custom ASIC rigs have, they more than makeup for it in their flexibility. When it comes to their use in enterprise mining, miners can also get a reduction on the operational cost of up to 40 percent, according to the Canada-based development company, Squire.
According to the team behind Squire, it claims that one mining enterprise group put the total estimation of this factor as being worth up to $60 million a year in how much companies saved.
But while there are a number of advantages that these FPGAs have for miners, this current generation is still a pretty expensive one to reprogram. It is as a result of this that miners making use of this technology have done so more covertly that openly, mainly due to the fact that, should they reveal this about their current rig, the developers would feel more inclined to change up their algorithms more frequently.
Into the [Mining] Breach
This is something that changed as of April 2018, when a relatively anonymous post on BitcoinTalk, the bitcoin-based forum, alluded to the kind of covert activity which involved FPGA, along with the underlying objective of allowing anyone that has a computer to mine using FPGAs. Since then, this users post resulted in over 93 pages of responses from miners that were eager to know more about it.
The creator of this technology goes by the online username ‘WhiteFire990,’ but searching that username led to his name being revealed as Eric Fattah. So what is Fattah’s objective with this technology? Simple: provide a better framework for decentralization:
“No one wants a single private group to be able to take over the entire coin, and large secret farms are therefore not in the interest of any coin’s future and security. Having FPGAs in the hands of ‘home’ miners (distributed equally all over the world) greatly increases a coin’s security.”
With his latest venture startup company, Zetheron, he has already made some major headway in providing this software to miners internationally, specifically providing them with FPGA software described as ‘BitStreams.’ At the moment, Zetheron offers this software free of charge, but does carry a 4 percent ‘development fee,’ meaning that out of every 100 minutes that it’s used for mining, four of those will mine to a Zetheron address. Fattah does, however state that this isn’t intended to bring in ‘big bucks’ for the company.
“Since our April 30 ‘reveal’ of the FPGA landscape, we have had many huge financial offers from large private farms, offering us lots of money to provide private/exclusive bitstreams for their private farms. In all cases we declined, as that defeats the purpose of what we are trying to accomplish.”
Along with providing this software to miners, Zetheron is working in conjunction with other hardware manufacturers and providing advice to them on how to design and optimize mining rigs, as well as how to enable the hardware in such a way as to make it adaptable to new software or software-based changes which may happen over its lifespan.
While FPGA based hardware remains expensive for the moment it, according to Fattah and his team, provides a much faster return on investment when compared with the more conventional GPU.
While FPGAs can help to really shape the world of cryptocurrency mining, there are still those coins out there that are not really suitable for it. Bitcoin, for example, is one of those that has a huge requirement for power, and has never gone on to change its algorithm, meaning that FPGAs would be allocating resources to a problem that doesn’t exist. As a result, this means that ASIC mining will continue to dominate the space.
For networks that are more purpose-built for the likes of ASICs and GPUs, such as Bitcoin Private, FPGA will not be able to make a strong incursion into its mining pools.
While this is true for Bitcoin and some of its hard-fork derivatives, the same is not true of the likes of Monero or Bitcoin Gold. Both of which work in such a way as to deter the use of ASIC mining in their pools. These two blockchains, for example, make a habit of reconfiguring its algorithms every few months or so, making it the perfect kind of environment for reconfigurable processors such as FPGAs.
These are even better suited thank to the announcement of the new 2019 models coming in through the next quarter of the year, meaning that they will be able to serve a good percentage of altcoins, including major chains like Ethereum.
There are also other coins that are aiming to provide algorithms that are more friendly in approach for those looking to make use of FPGAs, these include the previously mentioned Electroneum. Fattah said,
“With distributed FPGAs mining on a coin’s network, the chance of an ASIC takeover drops dramatically,”
“Because FPGAs are so incredibly fast, an ASIC may only have a 3x to 20x speed advantage over an FPGA, versus 30x to 1000x speed gain over a graphics card. This means that a coin that is being mined by FPGAs is way more resistant to ASIC takeover.”
Fattah believes that any mining operation out there seeking to outperform FPGAs, they would need a high level of expensive ASICs, making it a counter that would be far too impractical to actually take up. This is due to the fact that these same machines would cost far more in order to design, manufacture and ship, while making only a nominal amount more a day.
So, with the production of Bitstream continuing at a faster pace, there is far more interest for FPGA hardware, meaning that the underlying cost, which stands at $480 will likely change alongside supply and demand. These sales will also have a knock-on effect for the sales of GPUs and ASICs for the same purpose.
GPUs do have another use case, which is in gaming, and now with a higher level of decentralized storage, these same processors will be able to slide back into an old function. But what will come of those custom built ASICs?