The company that’s known for effectively, single-handedly causing the Monero fork as well as the development of ASIC resistance, is now threatening ZCash and all coins that use the Equihash consensus algorithm.
Does this mean multiple forks are imminent?
In understanding the development of an ASIC that can get around Equihash, it helps to first understand what an ASIC is as well as what Equihash is. When this understanding is achieved, it’s hoped that the true level of threat that ASICs bring to the Crypto industry might become clearer.
The acronym ASIC means application-specific integrated circuit, which appears to mean a microchip that can act as a tiny version of a computer. The benefit of using ASICs in the Cryptocurrency industry primarily relates to mining.
ASICs use far less electricity than regular computers simply due to their minuscule size, as well as due to their creation for singular purposes. All in all, according to Sigenics, a Silicon devices company, ASICs contain only the pieces needed to fulfill this singular purpose and no more. Therefore, if they are made to mine, then every part caters to this purpose.
The reason that we don’t have ASICs everywhere is that the initial capital investment for just one of them is quite high. According to multiple sources, the cost to develop one ASIC chip can run anywhere from $150,000 to $1 million, depending on its size.
So, we have specialized machines that are more efficient than regular computers and therefore, they mine crypto more efficiently than anything else. Why aren’t ASICs mining every cryptocurrency now?
The true answer is that it’s still hard to meet the specifications of a Cryptocurrency network. Each ASIC needs to be developed specifically for each Crypto-network, one by one. Thus, up to now, whoever has been developing the latest ASIC chips hadn’t decided that Equihash ASICs were an urgent need.
Just what is Equihash? Equihash is a Proof-of-Work based consensus algorithm. What this means is that consensus or verification of blocks is reached by the computer or node that most efficiently solves “the mining equation.” One can think of this as a very complex math problem that when solved correctly, indicates that the latest transactions on the network are valid.
Bitcoin’s consensus is as simple as this.
Equihash, on the other hand, has more of a specialized way of reaching consensus. While Bitcoin’s POW algorithm is largely based on the processing power of participating nodes in the network, the Equihash algorithm is what Zcash calls, “a memory-based algorithm.”
This essentially means that the difference between Equihash and Bitcoin’s consensus algorithms is that Bitcoin’s uses processing power while Equihash’s uses Random Access Memory. Upgrading RAM essentially boils down to taking your computer apart down to the motherboard and installing higher capacity memory cards in the RAM slots.
PCWorld claims that some computers only have two memory slots, so doing this would simply mean buying two new RAM cards with more megabytes of space on them. All of this also means that RAM is capped. You can only upgrade so much.
This is most likely why Zcash and other supporters of the Equihash algorithm believed that it was largely ASIC-resistant. Due to its dependence on RAM instead of on processing power, which can reportedly be more easily produced in a microchip, it did seem that Equihash was a long shot for ASICS.
Despite this, a memory-based ASIC now exists. What this truly means for Zcash and other Equihash-based Cryptocurrencies, is still up in the air. For now, it appears likely that as Zcash suggests on their website, Equihash consensus algorithms might need to be altered. If this fails, as a result, Equihash might become obsolete.
By: BGN Editorial