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    Posted January 28, 2014 by
    NikoPalmen
    Location
    Stockholm, Sweden
    Assignment
    Assignment
    This iReport is part of an assignment:
    Tech talk

    What repercussions will the technological evolution of Bitcoin mining have with ASIC hardware

     
    Consider this, with the current race of beating mining difficulty and harvesting precious coins in a continued hunt to make a buck on the latest “fly” in virtual currency. What will become of all hardware when mining becomes obsolete after reaching the maximum cap of invented Bitcoins. On the other hand the hashing power will have a continued need to secure any future transaction, but at what cost when hashing no longer rewards Bitcoins and needs to depend on transaction fees?
    Back in the days before mining became technology dependent and people went from CPU to GPU mining, the hardware was not specialized and initially produced for other means. Even FPGA can be used for other things than mining Bitcoins. But what will become of the recent use of ASIC hardware. The hardware is useless for nothing less than mining Bitcoin or any similar hashing activity with specific parameters. This was discussed on the subsidiary Bitcoin part of StackExchange earlier and recently brought up again on Bitcointalk.
    The ASICs are optimized for bitcoin mining. Not just Sha256(Sha256(x)) hashing, but very specifically bitcoin mining. You can't even use them for the Sha256(Sha256(x)) hashing in the rest of the bitcoin system, like hashing transactions.
    The ASICs are made for hashing 80 bytes, where you give them the midstate from hashing the first chunk (64 bytes), and 12 bytes from the second chunk. They then try all variations of the last 4 bytes to try and find a hash that starts with 4 zero-bytes. Only values that result in the 4 zero-bytes are reported at all. That's basically what mining is.
    The ASIC could aid in password cracking if:
    the hashes are generated with sha256(sha256(x))
    salt + password = 80 bytes
    the hash starts with 4 zero-bytes
    TLDR; forget about it.
    Essentially this means that it can be used as a coffee cup warmer at its best (depending on appropriate design). Even though there are quite a few years until we beat that cap, appreciated to year 2140, is there possibly a new market where some entrepreneurs may make a buck on timing?
    The hardware itself part to part is not useless except for the chip. Could you make money on collecting the obsolete miners and stripping them for other use? Even possibly paying a sum not even remotely close to the market value at release to motivate people to sell them?
    When the time comes, and if the value of Bitcoins doesn’t crash, could we possibly figure out some way to use the same technology behind ASIC mining and implement it using the same hardware? If so then successful companies behind the golden age of mining wouldn’t have to “die” and could reinvent themselves with other markets. A good example is today’s market share of total hashing power in the network delivered by manufacturer KnCMiner and amounts for 70%. Would they need to update the terms and conditions for their sales to accommodate any future use of said machines?
    Pending the outcome of the future I believe this could actually turn out to be quite interesting topic, especially considering the environmental aspect of it. If you would ask an environmentalist I think they would say the same with a pending slap in their face.

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