Author: ZmnSCPxj 2021-05-18 10:58:59
Published on: 2021-05-18T10:58:59+00:00
In a recent email exchange, ZmnSCPxj cautioned against simplifying economic considerations when considering new proof-of-work (PoW) algorithms. While acknowledging that negative externalities related to energy production are an issue with the current PoW algorithm used in Bitcoin, he suggested that PoW algorithms intensive in CAPEX (R&D, real-estate, construction, production) may have fewer negative externalities. However, another important externality to consider is the possibility of optimizing a new PoW algorithm and patenting it exclusively. ZmnSCPxj believes that SHA256d as used by Bitcoin will no longer have an optimization as large in effect as ASICBOOST in the future, as there is a huge incentive to find such optimizations and we have already found ASICBOOST (which has been patented but not enforced). Any alternative PoW algorithm risks encountering an ASICBOOST-like optimization that is currently unknown but will be discovered once there is a good incentive for it.
Updated on: 2023-06-14T22:00:10.040478+00:00