The team behind the anonymity-focused cryptocurrency Zcoin (XZC) recently implemented a new mining algorithm that it hopes will help make it feasible for average consumers to mine crypto.
The new algorithm, called a Merkle Tree Proof, is specifically designed to negate the advantages of ASIC devices, a special type of computer chip that has helped large corporations dominate the market. MTP has been in development for at least two years, and just a few months ago the team announced that the algorithm would be launched on December 10. The team fell a few days ahead of their road map and were able to update the protocol this week.
According to Zcoin's website:
MTP stands for Merkle Tree Proof. Based on an academic paper, it provides what the researchers call “egalitarian computing.” The idea behind egalitarian computing is to level the playing field between people with lots of computing power (i.e., large-scale mining farms) and those with little power (i.e., home miners). In other words, Mining for The People...MTP is designed to make intensive use of memory. This both increases the cost of ASIC development significantly and uses memory bottlenecks to reduce the ASICs advantage.
The team continued, noting that even if ASIC machines are developed and eployed on its network, the gain from them could be matched "well with commodity hardware." Moreover, it notes another "advantage of intensive RAM usage is that it would likely alert a user who got infected with malware and is now mining against their will as part of a botnet as is common with CPU-friendly coins."
A write up this week at Finance Magnates described the technical details of how the system works, detailing that users looking to pay with Zcoinssee their tokens get burned and replaced with 'Zerocoins' after a 70-minute wait. These are then redeemed for Zcoins once again, which are created brand new. This means the transactions history is erased, while the total supply is maintained.
This way, the news outlet notes, only the transaction's sender and receiver know about it. Moreover, a party involved in a transaction can prove it without revealing much more about it, maintaining their anonymity.
ASICs and Centralization
ASIC machines are specifically made to mine a certain type of cryptocurrency, and are superior to regular CPU/GPU miners. These have become the dominant tool for mining cryptocurrencies, including bitcoin. As a result of the upfront cost needed to buy and operate ASIC machines and of the bear market that saw most cryptocurrency prices drop significantly, cryptocurrency mining is becoming a business where only wealthy corporations could compete.
ASIC devices have become a point of contention among crypto enthusiasts, as they are often credited with the centralization of mining operations for whole networks in the hands of a few powerful companies. Other cryptocurrencies have also begun to put ASIC resistant measures in place. Earlier this year monero (XMR) went to war against ASICs, going as far as changing its algorithm every few months to make it more difficult for ASIC developers to keep up.