Mine Cryptocurrencies Sooner (Part 2)

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By Raymond Nijssen, Vice President and Chief Technologist, Achronix, Mar. 12, 2019 – 

Bitcoin has lost much of its allure due to the concentration of control of the world's Bitcoin mining resources by a few players in a few locations, as discussed in Part 1 of this blog. In response, the larger, global cryptocurrency community has started to develop alternative cryptocurrencies based on lessons learned from the Bitcoin experience.

New cryptocurrencies such as Monero introduce ASIC-resistance and memory-hardness to prevent ASICs from being built that give some operators a competitive mining advantage over others who do not have access to the same technology. These new cryptocurrencies, therefore, offer a more level playing field to cryptocurrency miners and, at the same time, tip the balance back to FPGAs as an implementation technology for cryptocurrency mining algorithms.

New post-Bitcoin cryptocurrency algorithms are being created to ensure that no single entity can dominate the new cryptocurrency. The most important of these techniques is called "ASIC resistance," which makes it impractical to build an ASIC implementation of the cryptocurrency mining algorithm.

The prevailing method to make a cryptocurrency algorithm resistant to ASIC implementation is to create a framework in which the mining algorithm can be changed to a new algorithm whenever necessary, say every six months. Such a change is called a blockchain fork. At each fork, all existing fixed-function hardware platforms executing the old algorithm immediately become completely and permanently worthless unless they can be reprogrammed to execute the new algorithm.

Examples of recent forks are Siacoin, Monero, or Bitcoin Gold forking. These forks intentionally change the associated blockchain to invalidate any previously released ASIC miners. There are also cryptocurrencies based on algorithms that are purposely designed to defeat attempts to add sufficient flexibility to ASICs. Others require proof of memory or storage to ensure that ASICs cannot accelerate the hash rate.

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