Bitmain has found itself in a war with words with the monero community over the release of its latest cryptocurrency miner, the Cryptonight-capable X3. The unit is being offered at a discounted rate to existing customers, but critics claim this is because the miners will soon be ineffective at mining monero, the main coin to use the X3’s Cryptonight technology. Monero lead developer Riccardo Spagni has emphasized that the units will not work on monero due to a scheduled hard fork designed specifically to outwit the Cryptonight algorithm.
Monero’s Crypto Nightmare
“We are pleased to announce the all-new Antminer X3, to mine cryptocurrencies based on the Cryptonight hashing algorithm,” tweeted Bitmain cheerily on March 15. The new units would start shipping instantly, limited to one per customer to prevent hoarding. The price would even be dropped to $3,000 for existing customers, according to an email. Posters on monero’s reddit board have urged buyers not to purchase the units due to the scheduled change to the coin’s Proof of Work algorithm. Others have gone so far as to accuse Bitmain of mining with the machines for months, and only shipping them now that monero’s algorithm is due to change, rendering them useless.
Cryptonight, the chipset fitted to Bitmain’s X3s, has turned into a crypto nightmare for anyone who’s been trying – and failing – to subsist off monero mining this year. As one keen-eyed observer spotted, after Bitmain took possession of the chips, monero’s hashrate rocketed. The monero team, led by Riccardo Spagni, who’s referred to Bitmain as “a known bad actor”, struggled to work out what had happened. A monero mining botnet that had infected millions of computers was one possibility floated, but this was discounted.
To combat the sudden increase in hashrate, Monero announced a PoW change on February 11 to make the privacy coin less susceptible to the Cryptonight algorithm. While not mentioning Bitmain by name, the post noted how “Mining, in general, is also prone to the rich-get-richer effect, which ultimately leads to centralization,” and continued:
We will perform an emergency hard fork to curb any potential threat from ASICs if needed. Furthermore, in order to maintain its goal of decentralization and to provide a deterrent for ASIC development and to protect against unknown or undetectable ASIC development, the Monero team proposes modifying the Cryptonight PoW hash every scheduled fork, twice a year…Finally, we will continue to research alternative Proof of Work functions that may provide better ASIC resistance than Cryptonight.
As a result of the hard fork, the Bitmain X3s will be largely worthless, at least for the purposes of mining monero. All that will be left for recipients of the new X3s is such alts as Bytecoin, Digitalnote, and Darknetcoin: shitcoins to all intents and purposes that cannot be easily offloaded onto the market to offset mining costs.
Anyone who orders one of Bitmain’s new units will find themselves engaged in a race against time. As one person complained: “Not informing their users that their machine will be useless to mine the biggest and most popular by far crytponight coin is misleading and that is being polite.” By the time they take delivery of their new Antminer, more Cryptonight coins may have hard forked, in which case buyers could wind up lumped with the world’s most expensive doorstop.
Do you think Bitmain has acted unethically, or is it just doing business? Let us know in the comments section below.
Images courtesy of Shutterstock, Bitmain, and Francis Pouliot.
Need to calculate your bitcoin holdings? Check our tools section.
Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.