Bitmain unveils first ASIC miner for memory intensive Equihash algorithm
After the launch of Bitmain's "E3" antminer about a month ago, many people joined in on the debate of whether or not ASICs are healthy for decentralization. Well, it looks like Bitmain twisted that dagger quite a bit yesterday when they launched the first ASIC for the Equihash algorithm, called the "Z9 mini". This will allow ASIC mining operations to mine Zcash, Zclassic, ZenCash, Bitcoin Gold, Bitcoin Private and more going forward. Despite this recent development, I think it's too early to worry about this and say that small operations are going to become obsolete.
Here are my reasons for why:
It takes a significant amount of memory to create an ASIC for Equihash, making it very expensive. This is what surprised me the most about Bitmain's "Z9 mini" launch the other day. Why create an ASIC like this when you know that you can't mass produce it yet? Maybe Bitmain is trying to flex its manufacturing muscle before Samsung or another tech giant beats them to the punch. Regardless, it's still going to be a while before the "Z9" can be produced on a massive scale, like the SHA-256 "S9".
Since the crypto market has been in a bear market cycle the last few months, a lot of extra ASIC hardware has been on the market, lowering the price for most of this equipment. However, with the high demand for memory, it's going to become very expensive to manufacture a "Z9" antminer and will in-turn raise the price (the "Z9" is already selling for $2000 on Bitmain's website). GPU prices are also beginning to decrease, which may make ASICs less appealing for a while if they go up in price again.
I'm certain that the mining community will fight back against centralized companies like Bitmain. The debate between ASICs and GPUs is fairly heated, which will inevitably lead to various blockchain projects switching their validation methods from Proof-of-Work to Proof-of-Stake, Proof-of-Capacity and many others. There may also be an attempt to jump from one algorithm to another. Proof-of-Work drives a lot of business and is responsible for a large influx of capital in the economy right now. Religious GPU zealots will continue the fight to remain relevant, potentially for many years.
Here's the conclusion. The "Z9" is a great technological achievement, but Bitmain is getting ahead of themselves for unclear reasons. GPUs aren't going to become obsolete anytime soon. They aren't going anywhere. In fact, there is a possibility that we may see even better GPUs come out of Nvidia and AMD. This market is too young and it's far too early to speculate on what may happen to Proof-of-Work. But, if we want a decentralized blockchain-based world, then ASICs may need to go. For now, keep calm and just keep on mining!