Why not ASIC mining?

The nature of memory being slow vs chips.

The question of why not to pursue ASIC mining hinges on the intrinsic relationship between mining calculations and memory requirements. Even with the most efficient mining algorithms, the need to interact with memory—which inherently takes time to build data structures—creates a bottleneck. This limitation is due to the fundamental disparity in speed between memory and processing chips.

While it's conceivable that memory technology could advance, becoming faster over time, ASICs are highly specialized devices engineered for rapid computation. For example, Bitcoin miners rely on ASICs for their operations, often needing to upgrade these devices annually to maintain a competitive edge. However, the demand for ASICs is limited to specific applications, making them niche products.

In contrast, memory is a universal requirement across various technologies and applications, preventing it from becoming overly specialized. The pace of memory speed improvements is steady but not exponential, and unlike other components in the semiconductor industry, memory pricing is difficult to optimize significantly. The market for RAM is well-established and commoditized, offering limited scope for drastic cost reductions through sourcing strategies.

Argon2, a memory-hard hashing algorithm, exemplifies these principles by making it impractical to leverage specialized hardware like ASICs for mining. This choice ensures a wider participation over time, as memory's universal necessity and gradual speed improvements keep the playing field more level.

Moreover, the economic calculus of mining, measured as hashes per second per dollar (h/s/usd), favors mid-range GPUs over high-end or specialized mining hardware. For instance, while high-end GPUs like the H100 or A100 offer formidable processing power, their cost does not proportionately translate to higher memory capabilities, making a $500 GPU nearly as effective for mining purposes. This affordability and efficiency make cloud mining, with its low entry barrier and accessible rental rates, an ideal strategy for mining XenBlocks.

In summary, the adoption of Argon2 as the hashing algorithm of choice reflects a deliberate strategy to democratize mining. By necessitating memory, which cannot be economically optimized for exclusive use like ASICs, Argon2 ensures broader participation and fairness in the mining process, embracing a philosophy that values inclusivity and equitable access to mining opportunities.

Argon2 is slow. But we want it to be slow because we want to have difficulty a consensus can form around decoupled from energy usage.