zooko, can I just give my view on the situation? The greatest problem is that it takes months to reach the West if ASICS are shipped from China and it is very expensive - it costs about $100 to ship ASICS. So in that time, the Chinese companies that mine are gaining control over all the coins that use ASICS, not only Zcash … and eventually a company like Bitmain will control the entire cryptocurrency market. I’ve seen the computer, internet revolution since 1980 and once there’s a dominant company in the market, they usually end up taking the entire market and ALL the profit. There’s a reason manufacturing is moving to China. It has a competitive advantage. So the moment you accept ASICS, the mining of your cryptocurrency will be dominated by the Chinese. So the greatest threat to your independence comes from miners that will dominate your coin, determine your financial future.
For better or worse, ZCash is in the position to be the Equihash market leader on this issue. Some coins have already indicated that they will fork to avoid the ASIC, others are still deciding. Some will, some won’t and ZCash has to decide what side of history it wants to be on.
I agree with you that whenever there is a pot of money to be had, there is a market incentive to obtain a larger share of that pot of money for a a cheaper cost. Accordingly, as long as a coin is valuable, there is a an incentive for someone (Bitmain, others), to develop an ASIC. However, ASIC development is not cheap. It likely took a team of engineers months to design, develop, test, and release the Z9 ASIC to the market. They likely spent millions of dollars developing this product on the bet that a significant portion of the coins that run the equihash algorithm will not fork, or that like Monero, the ones that fork away from equihash will have sub-communities that fork back. So ZCash has a decision to make – to accept the ASIC, eventually driving GPU miners to other coins, or to change the algorithm in a way that breaks the ASIC. If you allow the ASIC, in the short term nothing changes. In the medium term you hurt GPU miners, until another coin rises as their hero – and rest assured that there will always be room for an ASIC resistant coin, and in the long term you provide a tremendous amount of power to Bitmain, and any others who develop a suitable ASIC. If you (and the other big Equihash coins) choose to fork, you will inconvenience Bitmain – rest assured they recovered their cost of development before making this public just in case the major coins fork – and hurt the people who purchased the Z9 that will only be able to mine the remaining Equihash coins and the inevitable forks off of the major Equihash coins that fork. Will this stop ASICs? No, but it will make them think twice before offering their ASICs to the public.
With respect to your second point, I think you are mistaking the strengths of POS with the hazards of ASIC mining. The ASICs will be for all of Equihash, not just for ZCash, so there is no sunk cost investment into ZCash unless ZCash is the only Equihash coin left standing. More disconcerting is that you leave the future of your network in the hands of one (for now) company, who can build in back doors to manipulate the mining if they so choose. I don’t believe there is an easy way back from becoming an ASIC coin. If you want large sunk cost investments into the coin, add masternodes.
I recognize that right now your hardware is at the whim of two companies - NVidia and AMD. However their focus is not on domination of the crypto space, unlike Bitmain.
[quote=“zooko, post:638, topic:27353, full:true”]
2. I’ve been trying to educate myself about the state of cryptocurrency mining. I’m getting in touch with various big mining operations to try to understand their economics. I’m also learning about energy production (direct contracts with plants instead of sucking from the grid, renewables, etc.). One major unanswered question in my mind is: suppose you have a large, profitable GPU-mining farm. Why don’t you reinvest all your profits in scaling it up? In other words, why haven’t professional, large-scale GPU-mining operations already driven small-time miners out of business?[/quote]
The answer to your questions are risk and reward, and supply and demand. Large mining facilities may eventually push out small miners once the value of coins stabilize, as NetHash rates drive difficulty up to the point where the difference between wholesale electricity (~0.04/KWH where i live) and residential electricity (~.1 KWH) is the difference between mining profitability or not. NVIDIA and AMD’s ability to push out GPUs is a real-world limit on how fast the market can grow, protecting the small miner in the short term. The small miner also has very little capital investment assuming they use their GPUs for things other than mining too. In early March the mining market tanked, and we went from generating $4/1080ti to under $2/1080ti. Time to recover capital investment went From 10 months to 2 years or more. Power costs remained the same. The small miner was disappointed he made less, but life went on as normal. The market dip gave large GPU farms serious pause, so many turned to hosting as a hedge. We’ll sell an investor an obsolete $3-4k mining rig for $5k, charge him $84/mo to host, manage and power it, and recover our capital investment, establish a steady source of income and maybe fund newer rigs for ourselves. Secondly, aside from the cost difference in power cost, and the quantity discounts on GPUs – to the extent you want GPUs that can be bought in bulk, the small miner and the large GPU farm are playing on the same field. A 10KH ASIC that consumes 300w and costs $2k vs a $12-14K rig that consumes 10x the power as the ASIC for a comparable hash rate is not even the same sport.
[quote=“zooko, post:638, topic:27353, full:true”]
One thing I’ve learned along the way is that GPU mining is absolutely essential to Zcashers in Venezuela. If Venezuelans try to import ASIC miners (i.e. for Bitcoin, currently), then they risk having the miners stolen or extorted by the army which controls all imports. GPUs are not (yet?) nabbed on import like that, and anyway there are a lot more GPUs already floating around inside Venezuela. This really goes to the point that Simon has made a few times in this thread, that custom mining hardware is more vulnerable to special treatment by authorities.[/quote]
Fork for the Venezuelans!
If you fork you face a retaliatory dump (see monero) from Bitmain that has likely helped drive up the Equihash net-NetHash Rate using its ASICs prior to going public with them and is likely sitting on a pot of coins. However you maintain the decentralization of the coin and preclude making your coin’s mining network completely dependent on one company.
Exactly, thank you for pointing that out. So, my next question: was this done intentionally from the very beginning?
I know two groups that have been discussing hard forking away from ZcashCo. However, based on the clear lack of character displayed by Zooko they are no longer talking about that. Zooko cant be trusted and therefore neither can the key ceremony. Zooko does not care about bad PR, so it will be interesting to watch the trust in Zcash unravel while he spreads bad PR via his lack of character, leadership skills, and business knowledge.
Factor into that Bitcoin Gold is going to fork and there are ASIC’s on the network today. Once that happens existing ASIC’s will be forced to mine Zcash and GPU miners will flock to BTG due to difficulty drop.
Those are interesting ideas though neither adressess gpu mining viability, which is probably terminal anyways but I believe something can be done to extend it
The first one addresses a total asic driven situation which, assuming that bitmain story is true (which I personally am extremely skeptical of) that wouldn’t be necessary for Zcash until asic mining it starts to become unprofitable (as they say) as now btc, which the article addresses, possibly may becoming ( Revenues Down, Hashrates Up: 2018 Mining Outlook By The Numbers) because why else would you turn it off? Its self incentivized until its more costly, then yeah maybe 42M (or however many) Zcash and double reward just to keep them running
Now assuming that asic story isn’t true, I get the sense like miners just won’t like that payout scheme, even if they stayed and mined zcash because with the idea of inflation, the double block reward is actually the same block reward just halved and then strung out over time, or increase the transaction fees to compensate which doesnt sound good either, I think we’d lose more hashing than gain
The second idea is cool, it shouldn’t be necessary for snarks with the upgrade coming but starks and beyond, specialized equipment to handle the currently supermassive computational requirements would certainly accelerate adoption, figure a way to incentivize it through a reward system though may prove difficult provided the current level of protection with ST’s, would be almost necessary if
A- ZK snarks get broken
B- computational requirements are still too great when or if it (or its successors) are decided to be implemented
I would consider this an important seperate issue but yea, this is only an initial interpretation
Lastly, I get the feeling like some of this this Zooko bashing is a fud tactic, none of it contributes to the discussion, Im considering flagging it to make it go away just so I dont have to scroll so much
Edit - im gonna keep rolling those ideas around though
Here was my summary of the situation a few days ago which addresses the theoretical daisy chain as well Let’s talk about ASIC mining - #600 by Autotunafish
It seems dubious to suggest that ASIC-friendliness works in the face of a monopoly on specialized hardware production. If you want Zcash to be ASIC-friendly, you really need to offer evidence that this space won’t be monopolized by a single company (Bitmain). We can’t just stall and wait for evidence to appear which conclusively argues for one direction or the other; we need to assume the worst for the health of the network, and experience weighs heavily toward “Bitmain is uniquely capable of financing and deploying specialized Equihash miners.” The risks are too great.
The fact the community and developers have rallied around a PoW change has, in a way, killed the ASIC argument already. It seems unlikely that a competitor to Bitmain would gamble on Equihash at this point, so if you want ASIC-friendliness for Zcash, you better be prepared to explain why it’s okay for a single company to be uniquely positioned to build the hardware.
I think the idea suggests gpu feasibility no matter how powerful or centralized asics become because no chance of effective outhashing the other
Keep them in check while still within the zcash mission, I drew a picture (is it really so ridiculous?)
I guess there will be no another litecoin.
If zcash chose to be ASIC friendly then they will loss one of their most advertised virtues and I guess this will hurt the coin credibility.
Simply we know that by being ASIC friendly at least now when there is only one manufacturer you are helping only one party “bitmain” to drain zcash so I should ask my self why and for whoms benefits?
Since Roger Ver is an investor here they are allowing this to happen?
0 credibility going forward.
zooko,
Created an account to chime in here.
I suppose Im another one of those guys who assumed that the community (devs included) were opposed to the idea of ASIC’s in general.
I am one person with a few rigs, putting out 3 KH/s, and have been mining your chain since November 2016.
ASIC’s are a dealbreaker for me.
I would consider moving my rigs to a forked chain that will continue to try to keep ASICs out, even though as you said it would be difficult to maintain long term.
I dont expect a little guy like me to have any sway.
I just want to make sure that my opinion is heard and that you understand that by taking no action here you would essentially be showing many of us to the door.
If there is no clear statement about preventing ASIC from Bitmain, I will sell off my $ZEC very soon…
So, when I made my earlier post about what the Foundation can do about ASIC mining, I was pretty skeptical there’d be any credible announcement about a significantly effective ASIC. As such my suggestion did not present a particularly aggressive timeline (it began with, let’s wait until collecting community input up through June). My opinion now is that the Bitmain Z9 announcement is at least significant enough to warrant a better proposal what Zcash Foundation can do on a much faster time frame (Zcash Foundation is not the same as Zcash Co). I’m still uncertain about the overall question (aim to maintain ASIC resistance or not). But I’m going to spend some effort on how the Foundation can prepare for a PoW change as an option. And on how we can better make the decision when needed.
The only reason the community has rallied around a POW change is because their speculative investment in GPU’s is threatened. Zcash is already monopolized by two companies! So if there is one more company out there that produced ASIC miners then everything would be okay? Because there only needs to be one more to be exactly like CPU (AMD and Intel) and GPU (Nvidia and AMD) manufacturers. There are only three companies that are the major producers of said items.
IMO 90% of the people here only care about the $$$ the spent on GPU’s and nothing about the betterment of the coin. Want proof, read the posts here, a great majority of them only attack Zooko or others that list any positives that ASIC could do.
Just a few posts to make a point: no clear message well I’m going to sell my zec and … if you don’t fork I will take my rigs and point them to a new coin … admit you’ve been colluding with bitmain … as soon as you support asic I am gone and will convert my holdings to XXX …
I will wait for few days if devs are announcing some fork to make Zcash ASIC resistant then i will continue otherwise i will sell all my ZEC and will point my rig to some other coin, best i can do, it was a great journey with ZEC unfortunately ended sooner than i expect.
ASIC +PoS = Make ZEC Great again!!! I Think if ZEC change algo then investors should go with their money.
Because under the same algo, ASIC will drive away GPU miner, so zcash team’s silence on the fork means that they have given up ALL THE GPU by default.
Good. I hope they will not feel ashamed when they see “why equihash” on their blog.
Bitmain could keep “Antminer Z9 mini” behind the scenes and keep minig for years, which they did with Monero, but Zcash mining is currently (+ long term) worth much more.
They are waiting for zcash answer, they invested a lot and next time they wont sell product if we kill them after release.
I believe today is great day for zcash to celebrate this investment and honesty of producer, don’t worry about bitmain monopoly, more producer will join if we decide to give them battlefield. 
The coin is already a huge success, what is most important right NOW is independence and keeping the coin a success. This is the takeover period in business. The moment that the others see your success and want to take over your business, gain control over your business and its future. Don’t worry about what specialties someone can bring to a new successful business. That’s what Steve Jobs imagined, that John Sculley would bring a new direction for Apple. In the end John Sculley removed Steve Jobs as head of Apple and for decades and decades Apple struggled, until fortunately Steve Jobs could regain control over Apple by pure chance and was able to turn it into the most valuable company in the world. But this is the hostile takeover period for the coin. So any technological improvements is of secondary importance if you lose control over the project.
In my view, go and sign a deal with Sumsung or AMD or Intel or Toshiba or Texas Instruments or Fujitsu or some company that can build these ASICS specifically for Zcash if you are really worried about ASICS development, but build, design and sell your own ASICS and most importantly REMAIN IN CONTROL of the project, remain independent and do not allow any hostile takeover of your coin. Be in control and remain in control because that is the difference between being the best in the world and becoming the best in the world and falling away like 99%. Go read up how the best businesses didn’t remain in control and never recovered because of a hostile takeover. Do you think any of the big tech companies, Microsoft, Alphabet, Google will allow any entity to gain control over them? Once they do, it is usually over for the company because their creative genius and decision making process and adaptability is taken away from them - just look at Apple. That was just one board member that destroyed the world’s computer leader.
I just registered here 2 post my few cents
I am in crypto 5 years and during that 5 years i saw how is one idea off decentralized network and power to the people became more and more just a private money printing press for one company …in year maximum whole crypto world will be one chines company call bitmain …they will control 99% off all created cryptos …they will sell ASIC but at price they choice …this 2000$ ASIC probably dont cost them 200$ to build and will probably never ROI because they have better for them 2 mine …so they have ZERO risk and will make 1000% on it (they first mine with it and then sell it and inflatable price) and you small miner if you want to buy you are in big risk off your hard earned money and 90% will lose money and give it to them.
I mine zec for almost first day with my 10 GPUs and know many young people in my town in one small country in south east europe(will not name it) who has small mining rigs …no one will buy that ASIC or any ASIC so it game over for all off us…i can buy any GPU today but it will take 3 months from China ,import taxes,no warranty at all here (on GPU is 3 years here) and then like i sad it will never ROI 99% when finnaly arrive and if its working…so ASIC like i sad its game over for all off us here
I will just repost their WORDS
"WHY ARE WE USING IT?
Equihash has very efficient verification. This could in the future be important for light clients on constrained devices, or for implementing a Zcash client inside Ethereum (like BTC Relay, but for Zcash).
Equihash is a memory-oriented Proof-of-Work, which means how much mining you can do is mostly determined by how much RAM you have. We think it is unlikely that anyone will be able to build cost-effective custom hardware (ASICs) for mining in the foreseeable future.
We also think it is unlikely that there will be any major optimizations of Equihash which would give the miners who know the optimization an advantage. This is because the Generalized Birthday Problem has been widely studied by computer scientists and cryptographers, and Equihash is close to the Generalized Birthday Problem. That is: it looks like a successful optimization of Equihash would be likely also an optimization of the Generalized Birthday Problem.
Nevertheless, we can’t know for certain that Equihash is safe against these issues, and we may change the Proof-of-Work again, if we find some flaw in Equihash or if we find another Proof-of-Work algorithm which offers higher assurance."
SO you sad you will change but you want because bitmain has bilions off $ and can bribe no problem …so you lie 2 all the people in the world