A response to Coinbase regarding their criticism of Monero’s approach to PoW security

On November 8, 2019, Coinbase blogged an article authored by employee Mark Nesbitt covering its views on Proof of Work (PoW), This article included a good description of PoW and made some cogent arguments for the benefits of using Application-Specific Integrated Circuits (ASICs) for PoW. But it also made a number of incorrect points and reached an arguably inappropriate conclusion. This response corrects the errors and argues in favor of the ASIC-resistance path taken by Monero’s developers. Corrections include pointing out that the article’s description of Monero’s efforts to prevent the use of ASICs is old and outdated, and include countering technical and philosophical arguments made regarding the benefits of ASICs.

IssuesThe Coinbase article presents a case study on Monero that focuses on a six-month hard fork cycle changing Monero’s PoW algorithm to stymie ASIC application. Its criticisms regarding the risk and downsides of the cycle were correct and insightful. However, the cycle is historical, not current, as it was changed last March. Its issues were addressed with the release of Monero software version v0.15.0.0, called Carbon Chamaeleon. With this release, starting near the end of November a new PoW algorithm called RandomX will begin to be used. By creating random programs, RandomX enables the Central Processing Units (CPUs) found in everyday computers to be competitive for PoW calculations. RandomX is anticipated to give many years of ASIC resistance without requiring hard forks, a future opposite the scenario of the case study. Read More...

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