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ASIC chips from Bitmain could centrailze Ethereum mining

Pooja
Pooja

As reported by CNBC, rumors are that ASIC chips from Bitmain company, a new equipment in cryptocurrency market could centralize Ethereum mining. Apparently, this news has drawn the price of Ethereum to lower than its one week high of $585.

This news was surfaced after analyst Christopher Rolland visited China and learned the development of a new ASIC chip dedicated to Ethereum.

During our trips to Asia last week, we confirmed that Bitmain has already developed an ASIC [Integrated Application Specific Circuit] for the operation of Ethereum, and is preparing the supply chain for shipments in 2018.” Rolland wrote in a note for clients.

The fact that cryptocurrency market is predominantly using GPU’s for mining was alarmed by this announcement. This would lead to centralization of Ethereum mining as, devices with the ASIC chips, will make it difficult to enter the mining activity and displace the smaller miners.

Mikhail Avady, founder of TryMining.com said that,

Ethereum is one of the most profitable currencies available for GPU mining. It will affect a large part of the market. Without understanding the hash power of these Bitmain machines, we can not say whether it will make GPUs obsolete or not…

It can be seen as an attack on the network. It’s a centralization problem.”

However, it is still not necessary to be alarmed by this information. The Rollan report also states

While it is likely that Bitmain is the largest provider of ASIC (currently 70-80% of the Bitcoin mining ASICs) and the first to market this product, we have had knowledge of at least three other companies working in ASIC Ethereum, all in various stages of development.

Avady focuses on the future of mining Ethereum is not as centralized as you think and explains that,

What would be bad is that there was only one manufacturer of ASIC for Ethereum, but with Samsung and other players entering the game, it will not be bad for a long time. 

On the other hand, concerns over Ethereum’s price decline as a means of investment in ICO are likely to also weaken very soon, as said by Sky Guo, CEO of Cypherium

People are looking for higher quality blockchain projects. I believe a rebound in ETH’s price will come soon as panic surrounding regulations begins to fade.

ASICbitmaincentralizationCrypto Miningethererum

Pooja

Lead writer at Wolfcone.com and avid reader. My interests lie in everything and anything related to technology. I firmly believe cryptocurrency has the power to revolutionize world economy and blockc