Bitcoin Gold hash rate down over 90% after anti-ASIC fork

Posted: 5 July 2018 6:30 pm
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Were ASIC miners behind the Bitcoin Gold 51% attack?

Application specific integrated circuit (ASIC) miners are specialised and extremely powerful cryptocurrency mining machines, able to outperform less specialised machines, such as everyday graphics cards, several thousand times over. As such any proof-of-work coin that allows ASIC miners will start centralising around these powerful machines very quickly.

This rules out the smaller home miners, creates a very efficient "rich get richer" dynamic and risks making a coin more vulnerable to 51% attacks.

As such, ASIC miners are unpopular in a lot of circles, and many coins perform hard forks to prevent ASIC miners from working on their systems. Because ASIC miners are purpose-built for a very specific algorithm, updating the mining algorithm can prevent existing ASIC miners from working.

Bitcoin Gold was initially forked from bitcoin in November 2017, specifically for the purpose of being ASIC-resistant. It started using the supposedly ASIC-resistant Equihash mining algorithm instead of bitcoin's SHA-256. Less than six months later, in mid-May, it was hit with one of the most successful and profitable 51% attacks ever seen. ZenCash, also an Equihash coin, was struck shortly afterwards.

It's been clear for a while that ASIC miners make up a large part of the Equihash hash rate. The careless ones alone, who don't bother covering up their ASIC use, are thought to account for about 30% of the Equihash hash rate at a bare minimum.

A closer estimate might come from watching the Bitcoin Gold hash rate following the fork. So far it's down by over 90%.

This doesn't necessarily mean ASIC miners were making up 90% of the BTG hashing power. It's reasonable to expect a drop as not all miners update, and other obstacles come up. It hasn't been too long since the update either, but it is coming up to almost 24 hours at the time of writing.

A drop in the area of 90% wouldn't be unexpected though. That's about what happened to Monero after its anti-ASIC fork. So far, it all strongly suggests that Equihash has been very thoroughly ASIC-dominated for a while now.

All according to plan

One of the main things to remember is that anti-ASIC forks are not a permanent solution. They're just a way of temporarily shaking off ASIC miners until they can develop a new card. This hasn't been as effective as many hope though.

First, forks only buy about five or six months of ASIC resistance before the manufacturers catch up. Second, new ASIC mining cards usually stay secret for a long time before the public becomes aware of their existence. In the early secret phase of their existence, they're usually used by miner manufacturers themselves and sold in limited numbers to individual mining companies who pay huge amounts for a certain amount of exclusive mining time.

When the exclusive times run out and the secret miner is revealed, which happened to Equihash miners just a few months ago, there's a strong incentive for manufacturers or the exclusive miners to go out with 51% attacks while they will have a majority of the hashing power.

This is probably exactly what happened to Bitcoin Gold and ZenCash.

  • Secret Equihash ASIC miners definitively came to light in April/May, and Equihash coins started discussing anti-ASIC forks. At this point, they'd already been secretly used for months.
  • The first Equihash miners for public sale hit the market at the start of May, for shipping in June. With those on the market, the total hashing power increases and the secret ASIC mining companies lose their majority hashing power edge.
  • A spate of 51% attacks hit Equihash coins at the end of May. It's not certain, but it looks like these were launched by secret ASIC mining companies as a last hurrah before losing a majority of the hashing power.

Now, the Bitcoin Gold hash rate has plummeted after its anti-ASIC fork. If it doesn't recover further, it's safe to assume that ASIC miners were making up almost the entire mining pool. This might illustrate the extent to which secret ASIC miners are running the show.

The really disturbing part

51% attacks seem to be part of the strategy. The technique is to use secret ASICs as long as possible, then launch 51% attacks on the way out to help fund the next generation of secret ASICs.

Anti-ASIC forks aren't a feasible way of staying ahead of the game, especially not if those fork plans only kick off as soon as ASIC miners are publicly revealed. Committing to an ASIC-resistant strategy means developers are committing to constantly working on the next fork for as long as the coin exists. And even then, the forks need to be unpredictable and the plans secret to prevent ASIC manufacturers from anticipating them and manufacturing ASIC miners that are just flexible enough to follow the next fork.

The unfortunate fact might be that proof-of-work mining will always be ASIC mining, with a handful of exceptions, and that there's not a whole lot to be done about it. Constant anti-ASIC forking is a huge amount of effort, may not be effective and each one might risk baiting a 51% attack.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and NANO.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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One Response

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    LloydJuly 6, 2018

    This article doesn’t address the fact that the new mining algorithm, equihash-BTG, is extremely less efficient to mine at high hashrates due to the amount of memory required to mine. That is more than likely a huge percentage of what the drop is from

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