Following reports in March, Chinese mining rig manufacturer Bitmain has officially announced the release of the Antminer E3, an application specific integrated circuit (ASIC) engineered for mining Ethereum. These new ASIC miners should alleviate some of the pressure that the graphics processing unit (GPU) market currently faces, but many in the cryptosphere fear that the move will drastically increase mining centralization.
Mining With GPUs
At the beginning of last year when Ethereum was on the up, the GPU market started to feel the brunt of the excitement, and by mid-year GPU prices had begun to spiral out of control. To date, gamers across the globe are still feeling the “Ethereum effect,” with graphics cards selling for far more than MSRP — if they are even able to be found at all.
It used to be possible to mine Bitcoin with home PCs, but these days it’s very difficult to turn a profit. This is primarily because the Bitcoin mining market is now dominated by ASIC miners, which are engineered to do one thing: mine Bitcoin. These specialized devices are more powerful, and significantly more efficient at mining than graphics cards and CPUs.
Ethereum was intended to be ASIC-resistant because it relies heavily on fast memory; traditional ASIC miners feature powerful processors that can crunch the numbers, but not much in the way of memory. Bitmain has not yet revealed the full details of the Antminer E3, so it’s not clear how the company solved this problem. However, the specifications that Bitmain did release indicate that it’s possible the Antminer E3 ASIC miners will soon render GPUs obsolete for Ethereum.
Another problem for crypto-enthusiasts and the GPU Ethereum mining market is the Antminer E3’s competitive price. Bitmain is only asking $800 for each unit, a price that massively undercuts the current rate for a GPU-based system, which can add up to several thousand dollars.
Bitmain expects the first batch of Antminer E3 units to ship between July 16th and July 31st.
Earlier this week, in response to reports in March that Bitmain was in the process of developing an ASIC for Ethereum mining, Ethereum developer Piper Merriam opened up Ethereum Improvement Proposal (EIP) #958. EIP #958 requests community input on whether or not the cryptocurrency’s blockchain should render the (at the time) rumored Bitmain ASICs virtually obsolete. Such hardware would effectively diminish the ability for GPU miners to compete and, in doing so, drastically increase centralization. Merriam, in EIP #958, wrote:
“…BitMain may already running these miners. I believe it is the accepted wisdom that ASIC based mining leads to increases centralization when compared to GPU mining… Should we hard fork to make ASIC mining harder and to demonstrate a willingness to hard fork any future ASIC based ethereum mining?”
Although these are just discussions (not full-fledged proposals), Ethereum appears to be at a crossroads, and the community must soon decide if the risks of a hard fork outweigh those of letting Bitmain potentially centralize the Ethereum mining market. If early polls are any indicator, a hard fork could be on the horizon.