A fight is on for the soul of Ether. With a market capitalization of $73 billion, the biggest cryptocurrency after Bitcoin has been hailed as the future of digital finance because of its ability to layer software applications on top of transactions.
But as Ether rises in price and importance, powerful players within the virtual currency world such as equipment maker Bitmain are angling for greater control and profit. What’s at stake is domination of the process known as mining, where scores of computers solve complex mathematical riddles to win newly minted coins in exchange for processing the transactions that allow the network function.
Ethereum developers have always wanted the project to be “a world computer,” in which millions of people’s PCs and graphics card-based machines run the digital ledger. Such a wide web of participants “gives Ethereum extreme levels of fault tolerance, ensures zero downtime, and makes data stored on the blockchain forever unchangeable and censorship-resistant,” according to Ethereum’s documents.
The range of participants could be about to shrink, as Bitmain and others move in with a new type of computing hardware that could give them disproportionate power when it comes to confirming transactions. The new hardware, which should become available in July or sooner, could push out smaller miners and is “a nightmare for decentralization,” said Lucas Nuzzi, a senior analyst at Digital Asset Research.
Ethereum developers are rushing to stop the invasion. During a call last month, Ethereum co-founder Vitalik Buterin said that the risk will go away once the community deploys
Casper — software that will get rid of miners altogether and confirm transactions in a different way, which would expand the number of people involved in the process. Read more from bloomberg.com…
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