Most people who buy Bitcoin and other forms of digital currency, look at prices first and technical specifics last. Of course, not taking coin technical specifics into account can lead to significant losses further down the line. Did you know, however, that in recent years, a storm has been brewing regarding the fundamentals of how almost all cryptocurrencies are mined and transacted in the first place?
Blockchain decentralization is fundamental to the ethos and value of digital currency like Bitcoin.
When Satoshi Nakamoto created Bitcoin, he did so with the intention that anyone anywhere could mine Bitcoin. Because of this, the Bitcoin price and Bitcoin transaction ledger could (in theory) never be manipulated by a single central authority.
Sadly, ever since the invention of dedicated Bitcoin mining hardware, Bitcoin mining and transaction processing has started to be dominated by select groups of business and individuals.
Of course, what we know today as Application-Specific Integrated Circuit (ASIC) Bitcoin mining rigs don’t necessarily centralize Bitcoin. In theory, anyone can purchase and operate an ASIC mining rig. The only problem is that since 2013, Antminer mining rig manufacturer Bitmain has effectively monopolized the Bitcoin mining industry. Namely, by protecting its mining rigs with no fewer than 36 ASIC specific patents.
How Jihan Wu and Bitmain have come to dominate the Bitcoin mining industry is simple. At present, Bitmain owns the patent for a piece of ASIC chipset technology called 'AsicBoost.' - A mining rig setting which allows Bitmain Antminers to cheat Bitcoin's proof of work concensus.
As a basic rule, Bitcoin is rewarded to individuals and groups of miners who process the most transactions on the Bitcoin blockchain. What AsicBoost does, however, is allow Bitmain Antminers to resubmit blocks of code to the Bitcoin network, and in doing so, get rewarded for simply making it look like an Antminer has contributed more hashing power.
Of course, a simple solution to the AsicBoost problem would be for Bitcoin to prohibit AsicBoost mining altogether. Bitman Antminers, however, can implement AsicBoost covertly. Worse, because Bitmain’s AsicBoost technology is incapable of supporting Segwit, mass use of the feature increases overall Bitcoin transaction costs and processing times.
Needless to say, when miners have to choose between earning fewer Bitcoin by contributing more hashing power or earning more by contributing less, most choose the latter option. Finally, however, Bitcoin mining rig manufacturer Halong, has found a solution to the AsicBoost problem. This is thanks to the fact that Halong has secured a patent for a ‘version-rolling’ form of AsicBoost which does support Segwit.
Thanks to Halong’s ‘version-rolling’ version of AsicBoost, Halong’s Dragon Mint Bitcoin mining rigs, can be used to earn higher volumes of Bitcoin, while supporting Segwit and legitimately contributing to the Bitcoin network.
Because of the advantages to using Halong Dragon Mint mining rigs, many miners are already adopting the new technology. In fact, adoption by Bitcoin mining pool Slush Pool has already seen Slush Pool increase its Bitcoin mining market share.Bitmain mining pools like BTC.com, in the meanwhile, have started suffering 8.6% market share declines.
Of course, end Bitcoin investors and traders won’t see the Bitcoin price start to rise just yet. What is worth noting, however, is the fact that Bitmain and Jihan Wu are themselves the chief architects behind Bitcoin forked digital currency, Bitcoin Cash (BCH).
In order to (arguably) manipulate the Bitcoin Cash price in their favor, Bitmain only accepts direct payments for Bitcoin mining rigs in BCH. In theory, it is, therefore, not unlikely that if more Bitcoin miners start using ASIC devices from Halong, the Bitcoin Cash price could falter due to reduced transaction volumes paired with a reduced real-world need of the digital currency in the first place.