The cellphone-based blockchain platform, Electroneum (ETN) performed a U-turn by bringing ASICs back to confirm transactions after originally forking to become ASIC-resistant.
Electroneum’s founder and CEO, Richard Ells, said in the company’s Telegram group they decided to take ‘urgent action’ and re-introduce ASIC miners, reversing a fork that had integrated ASIC-resistant code at the end of May.
Electroneum intended its consensus model to become GPU-based, to make it both accessible and less prone to 51% attacks. Following the fork, however, the network failed to attract a sufficient number of GPU-miners for the network to run effectively.
“The GPU community actually convinced us to go anti-ASIC”, Ells told Crypto Briefing over the phone. “But when we did this, they [GPU miners] left in droves, which made the network less profitable for them and less secure for us and our users.”
Based in the U.K, Electroneum focuses on utilizing phones as a means to send and recieve micro-payments. Its primary user base is in emerging economies, where large proportions of the population have access to mobile phones but remain ‘unbanked’.
A fork from the privacy coin Monero, the Electroneum network removed many of its privacy features so the network could operate in jurisdictions that require KYC-procedures. “Being an anti-establishment coin won’t get us anywhere; we’re a cryptocurrency that needs to work with the operators and regulators to roll-out our services”, Ells said.
The company has already formed commercial deals and partnerships with mobile networks, including the South American operator Xius as well as Malaysia’s redONE; and has a strong user base in Central Asia as well as Bangladesh.
Effects of the Electroneum Fork
ASICs have centralized Bitcoin’s consensus protocol, with three mining pools constituting 48% of BTC’s hashrate this week. There has long been concern about whether Bitmain, which designs and uses its own ASICs, could soon be in a position to attack Bitcoin.
Asked whether welcoming back ASIC-rigs would place Electroneum in danger of a consensus attack, Ells argued it actually made the network safer:
“When we banned ASICs, Electroneum became vulnerable to attack”, he said. “From a rate of approximately 2 giga-hashes, we ended up with 30 mega-hashes just yesterday. We calculated that if a malicious agent used a cloud-mining site like NiceHash, they could successfully stage a 51% attack for as little as $3,000”.
The fork, which Ells preferred to call an “urgent update”, was also needed for the company to sign commercial deals as well as to finalize its listing on the Coinbene crypto exchange. “They [Coinbene] were worried about the network’s stability”, said Ells.
Now with a hashrate of over 500 mega-hashes, Ells argued re-introducing ASICs wouldn’t make mining on the network inaccessible for many of its users.
“Most coins using the CryptoNight algorithm are now ASIC-resistant, meaning that there are loads of secondhand rigs out there which can be bought for comparatively little”, he explained. “The low cost will stop Electroneum developing a high-barrier of entry”.
A micro-payments system like Electroneum needs to have fast transaction speeds to perform its primary function.
Although born of necessity, a move to ASICs seems counter-intuitive for a network that emphasizes accessibility and inclusivity.
CryptoNight ASICs may currently be inexpensive, but promising corporate deals could see Electroneum expand and become a desirable target for large mining pools.
If that happens, Electroneum’s ‘power to the people’ slogan could quickly become outdated.
This author is invested in BTC, which is mentioned in this article.