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Monero Miners for Sale!

If you’ve ever thought about getting into the mining game, then Bitmain has got a great deal for you: the China-based circuit maker has a new mining rig for Cryptonight, the mining algorithm used by Monero and other privacy coins. Originally priced at $12,000, the miner is now available at fire sale prices: the third batch of Antminer X3’s is priced at only $3000 USD, and the fourth batch is a steal at $1900.

If that sounds too good to be true, it is: you’ve only got about a week of high-profit hashing before Monero changes its algorithm. And, since the machines are scheduled to start shipping in June, you’d better prep your time machine. In a blog post last month the Monero Core team announced an “emergency hard fork” to neuter the usefulness of ASIC miners, with the possibility that further forks to the algorithm may become an annual event.

Just a reminder that this [Antminer] WILL NOT work on Monero

-XMR team lead Riccardo Spagni, responding to Bitmain’s announcement of the X3 Antminer for CryptoNight

Bitmain’s Monopoly of Power

The fire sale makes one more black mark for Bitmain, the miner-maker that miners already love to hate. Bitmain specializes low-cost application-specific integrated circuits (ASICs) which are much more efficient than home computers, making mining a losing proposition for the mass market. Bitmain’s ASICs have already spoiled the home-mining game for Bitcoin, Litecoin, Siacoin, Dash and many others.

Many cryptoenthusiasts regard Bitmain and other ASIC manufacturers with deep suspicion. Because miner rewards are used to incentivize participation in the network, the concentration of mining power in a few hands is considered a dangerous step towards centralization. Bitmain’s Antpool and BTC.com already account for around a third of Bitcoin’s global hashrate; add in ViaBTC, in which Bitmain has invested, and the proportion becomes closer to half. 

This raises the real threat that Bitmain or another ASIC producer could gain a stranglehold on crypto production. Last year programmers found a “Kill Switch” programmed into the firmware of Bitmain’s Antminer S9, potentially allowing the company to disable a huge fraction of Bitcoin‘s network.

Keeping it Private

Monero was intentionally designed with an eye to protect the privacy of its users, making it a favorite for darknet markets and other surreptitious purchases.

In order to stay fully decentralized, Monero was intentionally designed to be ASIC-proof, but alarm bells began ringing last year when the currency’s global hash rate spiked. At first blamed on a giant botnet, the sudden increase started to make sense when Bitmain’s miners went on sale:

The new miners mark the latest bump in a rough road for the Monero ecosystem. Earlier this month, MoneroV forked off from the Monero blockchain, much as Bitcoin Cash did from Bitcoin. Although naive users were eager to recover their forkcoins, cryptocurrency veterans warned that the new coin could expose their private keys. Last week the price of Monero recently dropped to $176, from a monthly high near $380.

Bitmain did not respond directly to their accusers, but they did append the following disclaimer to the Antminer X3’s information page:

2. There are financial risks associated with mining cryptocurrencies. These risks can be related to changes in exchange rate of the cryptocurrency or to changes in the algorithm that is used to mine the cryptocurrency. Please deliberate well before making a purchase because we will not accept any requests for refund for orders of this batch.

3. One major cryptocurrency which is using CryptoNight hash function is about to change their PoW algothrim, and according to their public statement, it is purposely to brick ASIC mining rigs including X3. When you buying it, you are betting that they are wrong (sic)

You heard them. No backsies.

About Andrew

The author is a starving writer and a shiftless traveller to antique lands. After many adventures in China, Iran, India, and South America, he made a tiny fortune in Bitcoin, which he prompty squandered on Cryptokitties. He now spends his time dodging his creditors and reading fanfiction to the blind.

His writing and photography can be found in several magazines and websites. Some of them are pretty good.

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