Ethereum’s ProgPoW Proposal: An High priced Sport of Whack-a-Mole

Dovey Wan and Martina Long are companions at Primitive Ventures, a crypto asset expense fund.


Lately, there has been discussion concerning a proposal to migrate ethereum away from proof-of-work identified as ProgPoW (shorter for programmatic proof of work). Proponents of ProgPoW want to flip the paradigm of the cryptocurrency mining business on its head. Their considered is: rather of making hardware to fit the mining algorithms, a to some degree “wasteful” tactic, we ought to be making use of mining algorithms that are optimized for GPUs to encourage the decentralization of mining.

At very first look, ProgPoW seems to decrease the benefit ASICs have more than commodity hardware, producing mining far more obtainable and as a result decentralized. But on further inspection, it becomes evident that ProgPoW doesn’t certainly democratize mining as it claims.

The latest implementation of ProgPoW, in reality, worsens the overall performance gap among the different GPU styles, with choice specified to the more recent and far more pricey GPU styles from NVIDIA and AMD (the RTX 2080, TitanX and Vega 64). The group at the rear of the proposition has been transparent about the reality that the algorithm is optimized for particular GPUs, and they are actively operating on a more recent model of the algorithm to make it far more fair to all styles.

(We will update the overall performance benchmark here when it is accessible.)

The table down below illustrates the hashrate reduction comparison among Ethereum’s latest mining algorithm, Ethash, and ProgPoW for different GPUs. Highlighted in crimson are the styles ProgPoW favors, which see a a lot smaller lessen in hashrate and higher enhancement in bandwidth utilization beneath ProgPoW.

The implementation of ProgPoW in Ethereum will perhaps serve to centralize mining further in the palms of these mining farms which have these higher-conclusion GPUs, or urge farm homeowners to update to these styles.


A nonexistent challenge

Putting that reality aside, the “ASIC threat” that ProgPoW purports to resolve is essentially not as a lot a challenge as one particular could possibly feel. Even ProgPoW builders admit that Ethereum’s algorithm is by now one particular of the most ASIC-resistant. The ideal Ethereum ASICs have a tough time accomplishing a mere 2-4x enhancement more than GPU mining, considerably fewer than Bitcoin ASICs.

Vitalik Buterin, the founder of Ethereum, is also not concerned about the threat ASICs pose, saying: “If you glimpse at the E3 that was unveiled a number of days ago the performance gains are rather tiny in comparison to existing GPUs. My Chinese resources indicate a 220 MH/s miner fees about $2,500, when Bitmain is presenting a 180 MH/s for $800, which is only a 2.5x element of enhancement.”


Certainly, nevertheless it is tricky to know accurately what proportion of Ethereum mining is executed by ASICs, most resources estimate that it is probably very minimal.

The “ASIC problem” is mainly a non-challenge for Ethereum. This is due to the fact an ASIC will have to have prolonged-phrase likely to be truly worth the higher upfront value to miners. Compared with GPUs, ASICs are remarkably specialized equipment particular to the mining algorithm they are developed for, and are ineffective for mining other chains.

With the swap to PoS prepared for Ethereum in the in close proximity to long term, it doesn’t make economic sense for most miners to further massively devote in Ethereum ASICs for their brief lifespan.

GPU mining != decentralization

The reasoning at the rear of the argument that GPU mining is far more protected is that, in concept. it would make mining obtainable to the layman, and as a result far more decentralized and resistant to 51% attacks. Typical “at-home” miners cannot afford to pay for pricey ASICs, and as a result if we want to encourage decentralization, GPUs are a greater possibility.

But in truth, even GPU mining is mainly concentrated in mining pools or farms, not in the palms of particular person hobbyists. Centralization in pools does not materialize due to the fact ASICs are inaccessible to the layman. Relatively, it is due to the fact of the benefit that economies of scale deliver in supplying miners belonging to pools a steadier payout.

Centralization in farms is mainly thanks to the cheap power accessible in particular areas.

Supply: ConsenSys Media

GPU helpful mining is not likely to encourage drastically far more at-property miners and it won’t dissolve existing mining pools either. Relatively than naively keeping on to the hope of producing mining marginally far more obtainable to a number of at-property miners who barely make a fall in the ocean, we ought to disincentivize these pools which dominate from attacking the method.

Listed here is where ASICs occur in.

Looking at ASICs in a different mild

The assumption that ASICs make a community fewer protected is misplaced. It comes from a failure to look at all the incentives at enjoy. Particularly, the reality that the specificity of ASICs is essentially a vital stability ingredient.

An ASIC is a device whose circuits are intended particularly to run a solitary hashing algorithm, and are ineffective for any other function, not like GPUs which are multipurpose and can be used to mine on many different chains. The sunk value of the two ASIC advancement and expense functions as a one particular-time entry ticket into community participation.

These kinds of a stability expenditure incentivizes ASIC miners to defend the chain in get to preserve the long term return on their significant hardware expense. Whilst a GPU miner does not need to have to be loyal to any distinct hashing algorithm and can simply swap again and forth among chains to enhance their profits, or even repurpose their hardware for non-mining activities.

Utilized GPUs can be resold for more than 50 p.c of their original value, when ASICs resell for only 5 p.c of their original value, and that value is also dependent on the value of the tokens it is particular to.

A vital element in a chain’s stability towards a 51% attack is no matter if there is excess hardware accessible for an attacker to accumulate hash electricity with. The excess hardware in ASIC mined chains is typically close to zero, but easily accessible for GPU mined chains.

It is incredibly tricky to swiftly obtain plenty of ASICs to start an attack even when it is worthwhile to, whilst there are a good deal of secondary markets for GPU hashrate and AWS GPU instances. The far more standard function the hardware is, the far more accessible excess capability there is, and the fewer protected the chain is towards attacks.

This is not basically theoretical — numerous recognised 51% attacks on GPU coins have by now took place. Most recently, Vertcoin and Ethereum Common. David Vorick goes into the subject of ASICs as a stability feature here and Dovey Wan has a thread on why 51% attacks are an evolutionary feature, not a bug, here.

Centralization on the manufacturing amount

Centralization on the hardware manufacturing amount is also a issue for networks, and GPUs are a lot far more centralized on the manufacturing amount than ASICs. GPU manufacturing has been mainly dominated by three distributors in the previous two many years, whilst ASICs continue to be a remarkably aggressive business thanks to the arms race of bigger mining margin.

In the previous, when a specified ASIC maker might have turn into the dominant maker of equipment for a specified hashing algorithm, they have never been equipped to dominate manufacturing for all chains. It is doable to overthrow an ASIC chief in a number of years, but practically unattainable to overthrow Nvidia, AMD, and Intel.

Any update to an proven mining algorithm comes with unproven stability risks and the hassles linked with upgrading a throughout the world method of miners. The upside of Ethereum adopting ProgPoW is negligible, because ASICs do not pose a huge challenge to the community.

And when it is no longer a lot of a discussion for Ethereum, which is quickly to swap to Evidence of Stake, other Evidence of Do the job coins nevertheless experience the issue of no matter if to freely permit ASICs. People chains ought to look at no matter if GPU mining definitely does boost the stability of their method or if it is, in reality, a stability vulnerability in by itself.


Lots of many thanks to Hugo Nguyen, Hasu, David Vorick, Nic Carter, James Prestwich, and Derek Hsue for encouraging acquire these strategies. This short article is for investigate reasons only and we at Primitive Ventures do not presently hold any $ETH, $And many others, or stock in any ASIC or GPU manufacturing corporations.

Whack-a-mole image via Shutterstock