Binance: Monero Household Mining Unprofitable, Vulnerable to 51% Attack Post-Hard Fork
By CCN: Monero recently hard-forked once again to stave off ASIC miners, who take over the network after a time and are disliked by the Monero community. Monero would prefer to be a CPU and at-most GPU coin, which is mined by the people who use it.
Binance discusses Monero’s moves in a new report released over the weekend.
Binance noted that there were some negative consequences associated with permanently kicking ASIC miners off the network.
Decreased Monero Hashrate Worries Binance
For one thing, a steep drop in hashrate, which was to be expected. For another thing, block times increased for awhile as newly dominant GPU and CPU miners took over the network. Binance does note that blocks were, therefore, more profitable to mine for a time.
“As a consequence, fewer miners were competing for blocks with pre-fork difficulty levels that assumed higher network aggregate hashrates, leading to longer block times. Interestingly, with longer block times, any adjustments that are implemented at future block height
mean that adjustment time is pushed back in terms of real time, further exacerbating the duration of these symptoms. It took roughly 36 hours for the average block-time to return to the normal average of two minutes per block. Unsurprisingly, the fork from April 2018 also led to a similar scenario (as illustrated by the first spike in the chart above to just under 10 minutes per block).”
Binance further concludes that “household” miners will not make a profit in Monero. This means that ASICs and automated mining farms are likely to continue to pop up in Monero. It may take developers some time, but if an algorithm can be mined, then an ASIC can be built for it. The recent bull trends in crypto markets will make mining a more lucrative offering all the way around.
Monero’s Lowered Hashrate An Expected Consequence of ASIC Purge
As a result of the hard fork which now has left Monero with a lower hashrate, Binance worries that the chain is vulnerable to a 51% attack. While this may well be possible, why wouldn’t the same people mine on the chain as is?
Currently, it would be more profitable to dedicate your power to the chain than to attempt to defraud it. If confidence were overall lost in the chain, you wind up with nothing. But if you have that kind of hashpower, and you use it to mine the network, you’re likely to be on the way up in terms of profits.
Monero intends to deal with the rise of ASIC hashpower by continuing to fork. According to Binance, another hard fork will happen in October.
The world of Monero mining is once again open to those with GPUs and CPUs willing to dedicate them to XMR mining.
Monero as a community prefers that this be the case, with a “democratization,” if you will, of mining through constant planned algorithm updates. At the very worst, it will make ASIC miners incredibly challenging to develop.
At a minimum, they would have to be more advanced than most hardware of their type, since they would need to continually update their algorithm.
Whether or not it’s an overall “good” thing for the network has yet to be truly determined. It will be determined by the market and by the growth of Monero as one of many privacy coins now available on the market.
When people consider their options, Monero is no longer the primary one. Nevertheless, a continued commitment to a fair and fruitful mining community is likely to keep interest in Monero.