Greg Maxwell is a developer for Bitcoin Core and chief technical officer at Blockstream who disclosed that a miner and manufacturer of Application-Specific Integrated Circuits (ASIC) uses AsicBoost secretly to increase mining revenue by at least 30%. Numerous sources disclosed it is without a doubt Bitmain which explains their disinterest in Segregate Witness. Bitmains products are acknowledged as the most efficient and powerful miner on the market and they sell the first consumer-grade 16 NM ASIC miner.
ASICBoost is the patented technique that aims to decrease the total cost per BTC mined by approximately 20%. It was designed by RSK Bitcoin Side Chain chief scientist Damian Lerner and former chief executive officer of Coin Tierra Timo Hanke. ASICBoost lessens the gate count on BTC mining chips, thereby improving the benchmark of energy consumption and system cost. This spells the difference between money-making and unprofitable Bitcoin mining.
ASICBoost exploits an error in Bitcoin’s proof of work protocol. Bitcoin security expert Andreas Antonopoulos explained it is a method which produces imbalanced Merkle trees to get a 30% increase in revenues. As it creates incentives to generate imbalanced Merkle trees, this could lead to several problems.
Mining Centralization & Bankrupt Non-Chinese Miners
According to Maxwell, covert usage can increase earnings of miners and mining pools significantly. He estimates those earnings at $100 million in total.
Utilization of this weakness can lead to high pay-off which is a maximum of $100 million annually at the time of this writing. This is assuming that 50% of the hash-power gained 30% power advantage and mining was at profit equilibrium. The possible result is exceptional centralization effect by making mining unprofitable for other participants. Income is made from employing this optimization surreptitiously. This may be misused to distort the Bitcoin ecosystem to a large extent and preserve