After two failed attempts to block ASIC, Monero will completely change its algorithm at the end of October

Monero (XMR) has had to deal with the problem of ASIC miners "invading" its network. After several forks, Monero's mining algorithm CryptoNight was adjusted to disable ASIC functionality. Now, Monero plans to switch to a completely different PoW algorithm to maintain its ASIC resistance.

Monero plans third ASIC-resistant upgrade

Monero plans to upgrade the network to enable CPU mining again at the end of this month. This upgrade will completely phase out CryptoNight and introduce the RandomX algorithm.

Jordan Clifford, a cryptocurrency enthusiast, said that Monero initially chose CryptoNight because it was difficult to create an ASIC miner for this algorithm. However, this is not the case. The Monero team is currently preparing to launch RandomX, which uses the current block and data from key blocks (every 2048 blocks) to generate a set of random programs and inputs that need to be executed together. The output of the program is then input into Blake2 to produce the final hash result.

The Monero network blocked ASIC mining twice, in April 2018 and again in the spring of 2019. The Monero community first noticed a significant increase in mining of the coin in 2018. At first, some thought it was caused by botnets or cryptojacking.

However, it turns out that there are ASIC miners and programmable machines that can adapt to the CryptoNight algorithm. After Monero disabled ASICs, some people switched to other coins using the same algorithm, including Haven Protocol, AEON, Bytecoin, and Electroneum.

The rationale for disabling ASICs is to return to the one CPU one vote rule based on the Bitcoin whitepaper. ASIC miners are much more efficient at mining than CPUs and can lead to a small group of people controlling the network. Not only does this create a more centralized network, but since ASIC equipment is usually more expensive, it also prevents lower-income miners from participating.

Regarding concerns that ASIC-resistant algorithms could lead to botnets, Clifford said that RandomX requires a lot of RAM to operate efficiently, and because of the large amount of RAM required, administrators can easily detect related activities.

Are ASICs really the enemy?

However, not all projects are ASIC-proof. Ethereum decided not to fork because of this. Other projects, such as Siacoin, decided to use a specific anti-ASIC solution to disable Bitmain's mining machines, but at the same time support the project founder's mining machine brand Obelisk.

ASIC supporters argue that large-scale mining operations can make cryptocurrencies more secure. CPU mining is less efficient and, in the case of Monero, could lead to more illegal mining.

XMR has been going through a tough time judging by its market price. The recent anti-ASIC fork is seen as a blow to the project, and Monero mining is expected to face another test. The past few forks did not mean the end of the Monero project, but rather caused it to lose its advantage in mining. At the same time, currencies such as Bitcoin have a significant advantage in the mining industry, and even Litecoin mining has become increasingly active.

At press time, XMR is trading at $52.94, having once reached a high of $1,000. XMR’s anonymity is no longer a selling point, as most exchanges are required to deanonymize and improve transparency after the introduction of new FATF measures, and many exchanges in Japan and South Korea no longer support anonymous coins.