Proposed ballot entry:
It would be in the best interest of Zcash community to preserve the decentralization of its stakeholders
while prioritizing the benefits that ASIC's offers. Zcash Foundation should, therefore, create a
non-profit ASIC Program, to research, develop and sell those mining equipments at cost for the community.
- Agree
- Disagree
For the last few weeks the community have been discussing the benefits and trade-offs between enforcing ASIC-resistant algorithms to achieve consensus in the network. The major discussion is happening here. What follows below is a quick summary from stances that I've been reading. I did my best to compile it fairly.
- GPU mining provides a more fairly1 environment for the general community
- Because of the aforementioned topic, GPU best serves one of the core missions of Zcash (see: Mission)
- It was stated that Zcash would be ASIC-resistant and people have made investments2 on those assumptions.
- ASIC's provide a stronger incentive to support the coin according to Game Theory.
- By making specialized equipment tied to a specific currency3, it becomes more costly to attack the network
- Permanent ASIC-resistance4 is not possible, and Hard Forks are risky/costly.
- Zooko, ZcashCo's CEO, has also suggested that ASIC's favors decentralization
From ZcashCo's website:
Our mission is to create an open, global economic platform from which no-one can be excluded.
This is a bit vague so I'm resorting to Zcash Foundation's mission5, which can be read more carefully here:
We support the transition of Zcash into a large and healthy community with diverse stakeholders, held accountable to its userbase in the broadest sense.
The scope of this proposal is left deliberately vague, and does not prescribe a particular action for the Foundation to take. Nor does the outcome indicate a particular technical approach in response. If this proposal is accepted, the Foundation will come up with an action plan to outline in a blogpost or another more specific vote.
This proposal is the result of some thoughts into the debate over the few weeks and the read of an excellent post. Every citation that follows is from there.
The idea of this proposal is to provide an even playing field in the mining sector. By leveraging the self-funded mechanism and the non-profit motivation of the Zcash Foundation, the organization has a special opportunity to foment decentralization and diversification of stakeholders while maintaining and increasing the network's security. To fulfill its mission, the Foundation could bootstrap a R&D departament in order to create open-source blueprints for Zcash's ASICs and, going even further, manufacture and sell those equipments without profit.
The vast majority of ASIC-resistant algorithms were designed by software engineers making assumptions about the limitations of custom hardware. These assumptions tend to be incorrect.
By employing dedicated engineers to this matter, we will be able to factually assert some statements and arrive at more scientifically conclusions.
The Bitmain ASICs are actually substantially less performant (5x to 10x) than our own internal study suggested they would be.
Developing an open-source schematics would leverage more minds between the world around those problems and arrive at better conclusions. It would also prevent companies from selling capped hardwares to customers that would soon be outdated.
The profitability of a miner largely depends on variables that the manufacturer controls without disclosure to anyone else. [...] Beyond this, the buyer has no idea how many were sold nor where the difficulty would be when the units shipped. The manufacturer does know whether or not the buyer is going to be able to make a return, but the buyer does not. The buyer is trusting the manufacturer entirely.
The Foundation would be able to bring credibility and fairness in the sector by revealing those numbers and letting the miners make an informed decision about their purchasers.
That is to say, Bitmain sold over a hundred million dollars in mining rigs knowing that the block reward was not large enough for their customers to make back that money, even assuming free electricity. And this isn’t the first time, they pulled something similar with the Dash miners. We call it flooding, and it’s another example of the dangerous asymmetry that exists between manufacturers and customers.
Same as above.
Our investigation into the mining equipment strongly suggests to us that the total manufacturing cost of the equipment is less than $1,000, meaning that anyone who paid $10,000 for it was paying a massive profit premium to the manufacturer, giving them the ability to make 9 more units for themselves.
By cutting the profits, the Foundation would be able to make ASIC's more easily acessible to people all around the world. Something that no other organization has ever done.
The Zcash Foundation is entitle to 1.44% of all the Monetary Supply according to this. Over the course of 4 years, the Foundation will receive approx. 300k ZEC, which, at today's rate, is close to U$92M. Although this isn't anywhere near close to Bitmain's revenue, (1) it might be enough to bootstrap a start and (2) we can expect the price of ZEC to rise with time.
Using Sia as an example, we estimate it cost Bitmain less than $10 million to bring the A3 to market.
This proposal is, nevertheless, very costly. Therefore, should be heavily discussed.
Here are some arguments against the proposal that I think it's worth noting and debated:
- This proposal adds tons of new responsabilities/work to the Foundation
- If a miner doesn't make a profit they could put the blame in Zcash Foundation - bad PR.
- A non-profit organization can't remain competitive against a for-profit one in the long run.
- This proposal is very expensive
1: "Fair" is a subjective concept that I've not seen defined by the supporters. So common-sense is required here.
2: Ranging from buying mining equipments to simply supporting/promoting it because they believe in this vision.
3: Assuming that there isn't two coins (with the same "relevance") with the same algorithm.
4: In Proof-of-Work systems, PoS is still being researched and might prove to be a good option in the future.
5: It isn't very clear, yet, how they might differ, but I'd assume the same core values.