Has Bitmain Been Abusing ASICBOOST Technology To Generate Millions In Revenue?

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It appears there is a lot of confusion regarding the Bitmain mining hardware right now. Their latest generation of miners contains a feature by the name of ASICBOOST. As a result of this feature, miners are effectively able to squeeze out slightly more hashing power. It allows the mining hardware to be more efficient as well.

What Is The Deal With ASICBOOST?

Although none of this information is new, there is a lot of confusion regarding how ASICBOOST works in the first place. Making bitcoin ASIC miners more efficient is a positive development, yet it appears there may be some hidden caveats. For example, the ASICBOOST functionality seemingly benefits the “mining cartel” controlling most of the bitcoin mining hashrate. In this particular case, that hashpower is mainly pointed at Bitcoin Unlimited mining.

Gregory Maxwell believes this feature can generate up to US$100m in additional revenue per year for such a mining cartel. Bitmain, the company responsible for creating the hardware and implementing this feature, is making a lot of money on the side if these allegations are true. Additionally, this solidifies the need for mining centralization, as all other mining participants will earn a lot less money.

What is even more astonishing is how ASICBOOST cannot be used on mining pools actively signaling Segregated Witness support. To be more specific, Maxwell believes that activating SegWit will render ASICBOOST useless, which is why the Chinese mining pools are openly opposing Segregated Witness right now. After all, it wouldn’t make sense for such a large mining manufacturer to roll out a product that is no longer profitable once a particular bitcoin scaling solution has been activated.

It is also worth noting ASICBOOST seemingly works better when a mining pool is mining blocks that are virtually empty. This would explain why Antpool, Bitmain’s mining pool, plans to continue mining empty blocks regarding of how all other miners feel about this process. Antpool has been mining a lot of empty – or nearly empty – blocks for quite some time now. This also allows the mining pool to “covertly” make use of ASICBOOST without anyone noticing about what is going on.

For the time being, it appears unclear as to what is going on with ASICBOOST and how it is affecting the bitcoin network. Gregory maxwell claims one of Bitmain’s flagship miners has been reverse engineered. If that is true, there will be severe repercussions for anyone using Bitmain hardware moving forward. Additionally, it will cause a lot of havoc among bitcoin community members and possibly even send the price plummeting. This news seemingly validates the user-activated soft fork for SegWit, as implementing this solution may occur a lot sooner than anticipated.

Header image courtesy of Shutterstock

About JP Buntinx

JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.

View all posts by JP Buntinx

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