Centralization has always been seen as a major threat when it comes to Cryptocurrency mining, and the discussion has been going on for quite some time. So far, the only solution is to either regularly change algorithms to resist ASIC developments, or switching to the proof-of-stake protocol. While the majority of the cryptocurrency community thinks that ASIC resistance is futile and would solve itself automatically, a major ASIC manufacturer is aiming to go through a different avenue, which brings us to Obelisk.
What are ASICs problems?
Many Crypto analogists and researchers are of the opinion that ASIC resistance is either futile or can even be perceived to be harmful in some cases. According to popular opinion, ASIC Miners are good only for securing a network and providing benefits to the specific blockchain they are mined on. However, a simple question arises, how can a cryptocurrency suffer from the disadvantages of centralization and supplier monopolies, but still reap the advantages of ASIC mining?
What are points for using Mining Manufacturer Obelisk?
This is where Obelisk comes in. In simple words, their plan involves offering a service to design and create a custom algorithm and start manufacturing ASIC hardware for a cryptocurrency even before it’s properly launched or updated. After that, they aim to release the specifications for free so that other companies can start manufacturing them as well.
How to solve Supply Chain Problems
A Chronic shortage of supply of new devices is a recurring issue for ASIC miners. For instance, when a device is up for pre-sale it usually sells out in less than an hour. Typically, those only included in the pre-order list would get the devices first, that too after 3 to 6 months after the announcement. The resultant market situation thus becomes extremely inflated, and trading opportunists can buy and hoard such devices, selling them off at a much higher rate. Thus, this creates an unfair market situation where smaller competitors are hit the worst.
The Obelisk’s plan can provide an efficient solution to this problem, by giving multiple manufacturers the opportunity to produce the device themselves, thereby increasing the supply for the devices. This, in turn, creates a balanced marketing environment for all parties involved. The price for the service is almost 410 Million, which may seem a bit high to most ICO projects. However, the main reason for this massive price tag lies in the fact that although Obelisk is providing unparalleled decentralization to the mining community, its own profit opportunities are almost nil. In other cases, for example, Bitmain, exclusive manufacturing rights for their own devices would give them unprecedented control over the market. Obelisk will allow smaller projects to simply hard fork into the open source Proof-of-Work algorithm made by Obelisk, which increased the availability of new ASIC devices.
Does Obelisk have potential?
The fruition of Obelisks’ endeavor could solve many problems plaguing miners in the current scenario. Several projects, both small and large can get protection by sharing a similar algorithm to go along with a standardized mining hardware. Of course, the system can face some unforeseen technical glitches, and one cannot say with certainty whether this venture would be a success before it formally launches.