Update on Potential Changes to ZenCash Mining Algorithm
I discussed my thoughts on whether ZenCash should change the Proof of Work (PoW) mining algorithm on the biweekly update livestream yesterday. I went through it pretty quickly, and wanted to write down what I think I said about the decision elements regarding changing the algorithm. Just like everything else in the cryptocurrency space, this is a complicated issue, and does not boil down to something simple like “When Fork?”
These types of decisions are hard to make. Until we have the Governance protocol in place, where the different ZenCash stakeholders can vote to express their preferences, the members of the ZenCash team have to work to determine the will of many different elements of the ZenCash community, make a decision, and move forward. No matter what we do, there will be people that are unhappy with the choice, and will joyfully express that unhappiness. That’s part of the reason we are working to evaluate many different aspects of the available choices before making a change.
All Proof of Work algorithms that are in use will have ASIC mining hardware developed for them at some point. ASIC resistance only means an algorithm has a lower amount of energy expenditure differential between hashrates mined by CPU, GPU, FPGA, and ASIC (for that algorithm). It is possible to temporarily become non-mineable by ASIC’s by changing to an algorithm that does not currently have ASIC miners available for it, but that is not ASIC resistance, it is only delaying the inevitable.
Changing the mining algorithm is a mandatory upgrade that everyone running ZenCash nodes needs to accomplish within a limited period of time. This affects exchanges, wallets, and anyone else running a ZenCash node. A mining algorithm change temporarily reduces the hash rate for a period of time, making the project susceptible to a 51% attack until miners have moved over to the new mining algorithm.
The way to become a category leader for an ASIC is to first become a category leader in an Algorithm. Zcash is, right now, the category leader in Equihash with parameters N=200 and K=9. There are multiple ASIC miner vendors for that algorithm, further securing the Zcash blockchain.
One of the goals of ZenCash is to have a secure network. If ZenCash keeps the same algorithm as Zcash, then ZenCash is not a category leader in a mining algorithm. The 51% attack mitigation change to the Satoshi consensus should help mitigate that attack vector, which is good. So ZenCash would have the option to stay on the Equihash algorithm with 200, 9 parameters.
It’s also worthwhile to look, longer term, to change to an algorithm that is more balanced between CPU, GPU, FPGA, and ASIC. The most balanced algorithm between GPU and ASIC in production right now appears to be Ethash. There are other algorithms in development, including Prog-POW and Merkle Tree Proof (MTP), that may be even more balanced between CPU, GPU, FPGA, and ASIC. One of the reasons for making this change is to give as many different people the opportunity to mine ZenCash as possible, expanding the community. This type of algorithm might be a good one to change to at the same time that ZenCash potentially changes from blockchain to blockDAG.
In the mining world, there are many miners who have GPU miners that are finding it unprofitable to mine either Zcash or ZenCash, because of multiple factors, one of them being the entry of Equihash ASIC miners into the marketplace. If ZenCash were to change to a version of the Equihash algorithm with parameters 144,5 that can not be currently mined by ASIC, there would be many GPU miners that were mining Zcash that would change over to mining ZenCash. They would then use our wallets, evaluate the potential of retaining mining earnings for Secure Nodes, and find out more about ZenCash, which would be good overall for the project.
By making the change, ZenCash would have a chance, over the next year or so, to become the category leader in Equihash 144, 5. Depending on what the ASIC manufacturer’s decide, they might build an ASIC miner for Equihash 144, 5. At that point ZenCash would have the opportunity to be a category leader in an algorithm mined by ASIC’s. That would be a good position to be in from a project security standpoint.
If Zcash announces that they intend to change to a different Algorithm than Equihash with parameters of 200, 9, that opens up an interesting possibility for ZenCash. There are already multiple ASIC mining vendors for that algorithm. If ZenCash stayed on that algorithm, then when Zcash made the change away from it, ZenCash would have the opportunity to be the category leader in that algorithm.
The ZenCash team should be making a decision soon on whether to change the algorithm based on the existing software development schedule. That would provide enough time to create an algorithm change and test it in testnet before the next scheduled mandatory upgrade at the end of October.
There are other factors that go into the decision, including the priorities of other software development, moving away from compatibility with Zcash, as well as many others. There is never complete information, and sometimes the information that is needed only appears after a decision and change is made. From my point of view, we are doing the best we can to balance the different expressed desires of the community while maintaining the security of the ZenCash project.
ABOUT THE AUTHOR:
Rolf Versluis (also known as BlockOps) is co-founder and Special Advisor of ZenCash. Rolf is an experienced data network security professional with over a decade of experience designing, installing, and troubleshooting systems as the CTO of the company he founded in the IT industry.
In the cryptocurrency industry, in addition to his work at ZenCash, Rolf operates private cryptocurrency mining facilities with over 600 operational systems, and hosts both a blog and YouTube channel providing instruction and assistance to cryptocurrency miners worldwide.
For both ZenCash and mining, Rolf uses his engineering background as well management and leadership experience from running a 60 person IT company for 14 years and as a US Navy nuclear submarine officer operating out of Hawaii for four years.
Related articles:
ZenCash Statement On Potential Equihash Algorithm Change
About ZenCash
ZenCash is a privacy-oriented platform that leverages zero knowledge cryptography, cutting edge research and provably fair incentives to maintain an inclusive, sustainable and censorship resistant ecosystem. Our aim is to be the world’s most decentralized organization while providing our users with a secure platform for money, messaging and media.
August 9, 2018 @ 5:49 pm
Thanks Rolf! I’ve been mining zencash since November. First with GPUs and now with ASICs (Inno A9s). I’ve been a huge fan of ASICs primarily due to power efficiency, ease of use, network security, having gamers not be pissed off, ability to mine in harsher weather, less maintenance, etc. I haven’t been a fan of switching to 144,5, but switching to Prog-POW and MTP may be intriguing. You brought up some great points. Glad you guys are giving this a lot of thought and not just jumping ship. What about waiting for the release of Nvidia’s next gen GPUs to consider it? The speed of the new GPUs, may deter/delay financial incentive for ASIC production on a new algo.
Initially when there was just one known equihash ASIC the fear of centralization was high, but now with several manufacturers producing equihash ASICs I don’t think centralization is as big of a concern. Where can I find more information on the Governance protocol for Zencash?
August 9, 2018 @ 10:51 pm
Steve, glad you are a ZenCash miner. Those Innosilicon A9’s are crazy efficient! I don’t have any, but a friend of mine does and he loves them. He’s going to order some of their X11 miners also. One of the other considerations is that ZenCash is a global cryptocurrency, and some countries have import restrictions on ASIC miners.
The best way that I have found to get up to speed on ZenCash governance is by reading the research paper from IOHK and watching the video of the voting prototype here: https://blog.horizen.io/dao-prototype/
August 10, 2018 @ 12:24 pm
Appreciate the insight Rolf! I am happy you included the meme “When Fork?”. Abruptly changing the course of a company’s direction in the wake of external events is not a decision that can be taken likely. I don’t think I would be out of scope in saying the majority investing in crypto do not have an understanding of the challenges each company faces with the rapid technological advancements being made weekly, if not daily, in crypto. The high level you have provided gives a good overview of the challenges your team, and other companies in the crypto space, are facing. There is a ton of boxes to check and re-check before driving your company in an alternate direction. However, the “When Fork?” group seem to be focused on their own interests and have done little due diligence researching the security offered by advancing technology, the steps taken to govern centralization with the technological advancement of ASICs, and how to manage partnerships with developers and companies you do business with. Its a balancing act and any choice can completely tip that balance in the favor of your, and cryptocurrency’s longevity as a technology, or against you. Again I appreciate the insight you continue to provide as you, and your team, build the ZenCash company and help advance the technology.
August 15, 2018 @ 4:49 am
“In the mining world, there are many miners who have GPU miners that are finding it unprofitable to mine either Zcash or ZenCash, because of multiple factors, one of them being the entry of Equihash ASIC miners into the marketplace. If ZenCash were to change to a version of the Equihash algorithm with parameters 144,5 that can not be currently mined by ASIC, there would be many GPU miners that were mining Zcash that would change over to mining ZenCash. They would then use our wallets, evaluate the potential of retaining mining earnings for Secure Nodes, and find out more about ZenCash, which would be good overall for the project.
By making the change, ZenCash would have a chance, over the next year or so, to become the category leader in Equihash 144, 5. Depending on what the ASIC manufacturer’s decide, they might build an ASIC miner for Equihash 144, 5. At that point ZenCash would have the opportunity to be a category leader in an algorithm mined by ASIC’s. That would be a good position to be in from a project security standpoint.”
This argument is very very odd. These miners will change to whatever they find most profitable. You have to count with USD/ZEN ratio vs other minable coins USD ratio in this. For me is the most important thing the security of network, and this can be achieved only by ASIC. I am not happy that my GPU rigs will become obsolete, but thats life. Changing parameters to have algo more memory intensive only leads to uncertainty. My friend is also fan of conspiracy theories so just imagine if you change algo and some goverment or another entity construct asic with enought memory in undercover and attack network.
All things considered, for me is better to look over hashrate distribution between pools and stay with algo with latest technology and most effective mining.
LET THE MARKET DECIDE THE FATE AND SUCCES OF ZEN, NOT THE MINERS (they are mostly only greedy bitc**s 🙂
August 16, 2018 @ 8:22 am
Decentralized, rejecting ASIC and creating the most fair and secure cryptocurrency in the world. If you use asic, then this fairness will be broken and become a product of centralization. What is the significance of decentralization? Resolutely resist ASIC.
August 23, 2018 @ 12:01 pm
Agree. Resolutely resist ASIC.
August 16, 2018 @ 8:38 am
ASIC deconstructs de-centralization and becomes a product of concentration. There is no difference between ASIC and centralized server. A rich person can do it without fairness, without dispersion, without nodes in cities around the world. Resolutely reject ASIC, support GPU mining, reject ASIC, and never compromise.
August 17, 2018 @ 7:02 am
ASIC resistance isnt decentralization……or you think that GPU huge operations facilities are kind of decentralization? LOL