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Wall Street firm claims Ethereum [ETH] mining through Bitmain’s ASICs

Abhishek Anil

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Wall Street firm claims Ethereum [ETH] mining through Bitmain's ASICs
Source: Stockfree

Bitmain, the company which operates the most substantial cryptocurrency mining operation in the world and one of the industry’s largest suppliers of Bitcoin ASICs has practically cornered the Bitcoin mining market with its Antminer S9. According to a Wall Street firm, Bitmain has developed an ASIC chip to mine Ethereum.

Susquehanna Financial’s Christopher Rolland in a statement confirmed:

“Bitmain has already developed an ASIC for mining Ethereum, and is readying the supply chain for shipments in 2Q18”

There is rising deal of discomfort and concern over new Bitmain Ethereum ASICs. It is a mining software which is vastly superior to GPU while other users are skeptical about the creation of Hard Fork.

A Twitterati commented on the news:

“Another bad news of a day”

Bitcoin’s mining algorithm, based on SHA-256 cryptography, is vulnerable to becoming engineered into an ASIC chip. The ASICs used to mine Bitcoin are more efficient than other computer hardware. Hardware specialization is undeniable as it makes sure that only miners who can save money purchase or develop hardware can mine profitably.

The Wall Street firm also claimed that AMD and Nvidia will face a specialized digital currency mining chips by the end of the year.

Christopher Rolland also stated that:

“While Bitmain is likely to be the largest ASIC vendor (currently 70-80% of Bitcoin mining ASICs) and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development.”

It is not unusual for hardware vendors to purchase average performing GPU sput them in a black box, and sell them by rebranding it as a ‘specialized Ethereum miner’. Many specialists claim that most of Bitmain’s revenue is generated through selling the rigs mined their chips.

The ASICs that used to mine Bitcoin are more efficient than any other kinds of hardware. But by limiting access to specialized equipment, Bitcoin mining thus becomes unprofitable.





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Coin Metrics data reveals inaccuracies in Kik’s claim of being as dominant as BTC, ETH blockchains

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Source: Pixabay

Upon investigating Kik’s claims in response to SEC’s lawsuit filed earlier this month, CoinMetric data reported inconsistencies in the on-chain activity and adoption rate of its native token, Kin.

In a study dubbed, “An Analysis of Kin’s On-Chain Activity,” the crypto-asset elaborated on the two assertions made by Kik in its letter to the US Securities and Exchange Commission.

Kik’s first claim was regarding its blockchain activity. Its in-house token, Kin, supposedly exceeded Ether and Bitcoin to record the fifth highest daily blockchain activity. This was debunked by CoinMetric’s investigation after taking into account its “Operation Count” [the same metric used by Kik to support their claim] and “Transfer Value.”

In terms of the Operation Count, the report explained,

“According to Kik’s source for the metric, “blockchain activity” is defined as “the number of operations on the blockchain in the last 24 hours.” Operations are broadly defined as any type of action that could be recorded on chain. But operations are not standardized across blockchains which makes comparing across chains difficult.”

Besides, drawing parallel comparisons across blockchains with radically different use cases and operations is difficult.

Although Kik’s original research showed a high number of account creations, Coin Metrics data revealed that many of these accounts were empty.

Additionally, Kin’s “create account” operation has a fee of .001 Kin. The report highlighted that a metric such as “operations count” for the purpose of blockchain activity cannot be used as a measurement tool since Bitcoin and Ethereum blockchains do not track account creations on-chain.

In terms of Transfer of Value, the report elaborated,

“Theoretically, high daily transfer value should signify high activity. But transfer value is often quite noisy, especially on low fee blockchains where there are minimal costs to sending transactions. Some transfers might simply be users moving money around between addresses they own”

Instead, Coin Metrics contrived “adjusted transfer value” metric to eliminate what it called, “noise and certain artifacts like self-sends, or deliberate spammy behavior.” Coin Metric noted that this gives a clearer picture of the on-chain activity, resulting in a decreased transfer value when compared to other blockchains, even if it had a high number of daily blockchain operations.

Additionally, Kin’s average transaction value was also low, when compared to other blockchains. For the first claim, Coin Metrics concluded that the Kin platform had more micro-transactions than Bitcoin and other dominant blockchains, while highlighting the fact that the latter blockchains are not primarily used for such transactions.

Regarding Kik’s second claim that said that over 300,000 users were earning and spending Kin as a currency, Coin Metrics assessed its blockchain usage. The number of addresses is not necessarily equal to the number of users since a single user could have multiple addresses. Hence, Coin Metrics took the number of active users into account, which the report defined as “the number of unique addresses that were active in the network [either as a recipient or originator of a ledger change] during that day.” The report noted,

“Kin 2 has significantly more originating active addresses than Kin 3. Although Kin is in the process of migrating to Kin 3, it appears that Kik is using data from the Kin 2 chain to support their claims about usage.”

Further, Kin 2 and Kin 3 had more active addresses that received payments than originated payments, which meant that there were more “earners” on Kin than “spenders,” also noting that only 35,000 addresses held over 10,000 kin [nearly $0.23]. The report added that the figures are lower than other blockchains which have a minimum of 1,000,000 addresses with at least $1.

After examining multiple critical aspects, Coin Metrics concluded that Kin fell below dominant blockchains in terms of daily active addresses, despite maintaining steady growth. It said,

“A majority of Kin’s active addresses have small account balances. While this makes sense for a network built around micropayments, when viewed across multiple metrics, our data show that Kin is not more widely used than dominant chains such as Bitcoin or Ethereum.”





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