Fund PoWx makes a new attempt to change the algorithm of Bitcoin mining

A long-standing controversial proposal to change the algorithm of Bitcoin mining had the opportunity to take a new step forward.

With the support of some of the Core developers of Bitcoin this week was launched a nonprofit Foundation PoWx development of the idea that acting in the Bitcoin blockchain algorithm proof of work (PoW) can be replaced by newer, presumably more sophisticated algorithm.

Briefly, PoWx in favour of the introduction of new Bitcoin technology, which the Foundation calls «optical» proof of work where more energy efficient laser technology is used as a cornerstone of mining cryptocurrency.

They hope to «fix» mining, making it easier for more people involved in this process, partly because the barriers to entry in the industry are too high. In early 2009, users needed a simple laptop for bitcoin mining. Now they have to buy specialized computers costing thousands of dollars that only work for mining.

Developers, collaborating with PoWx – one of those who are dissatisfied with the influence of the company Bitmain on the network and sees this as a big problem. Although exact figures are murky, it is estimated that the company produces from 50 to 80% of the equipment for mining bitcoin and many alcaino.

Against this background, the idea about changing the hashing algorithm for some time mainly broke out in times of crisis. She was regarded as a last resort only if the miners will do something really bad, for example, conspired to attack the network.

But the founder PoWx Michael Dubrovsky (Dubrovsky Michael) believes this change is inevitable. He called the centralization of bitcoin mining «Zadonskom crisis» — a special type of out of the ordinary problems, which was proposed in the cycle of science fiction novels by Isaac Asimov «Foundation», and which refers to the point of no return. Dubrovsky said:

«I believe that the consensus PoW is the most important innovation in bitcoin, and bitcoin is an incredibly important innovation in personal freedom and property rights».

He therefore argues that the change in underlying technology would help «to ensure health and scalability of the ecosystem that will help support the growth of cryptocurrencies over the next decade.»

The best way to go?

In a broader sense, the developers have long been concerned about the level of «centralization» of bitcoin or a measure of how control over the network has one interested party. Decentralization is seen as a key distinguishing feature that makes bitcoin an unprecedented phenomenon in the history of money.

Therefore, the developers believe that if this problem is not resolved, the centralization of production can lead to the fact that bitcoin will turn into something similar to the traditional financial system, which it needs to be replaced. To try to solve this problem, the developers implemented a lot of possible technical fixes.

Dubrovsky interested in the change in the mechanism of proof-of-work as one of the possible solutions to the problem, and began working on the idea about a year ago, when convinced that the optical PoW is suitable for this purpose.

According to the team PoWx, if a new algorithm is implemented, it will lead to two huge improvements in Bitcoins. First, it will reduce the barrier to entry in the industry of mining for startups producing chips that will increase decentralization of the network. Secondly, it will help to reduce energy consumption (according to current estimates, mining bitcoin already accounts for 0.15% of global energy costs).

However, PoWx is faced with one serious obstacle – lack of funds. But the Fund’s objectives are very ambitious. In the short term, the Fund promises to develop equipment with open source software, to realize optical PoW life, and to run a test network to demonstrate your project open source to the 1st quarter of 2019.

In the long term they hope to start a commercial company called Arrakis Photonics to begin production of this state of the art optical equipment for mining. (In the presentation
set out more specific details, including the technical parameters of the equipment that they want to create).

Solve all the community

Despite the fact that PoWx lot invested in this concept, to change the algorithm of Bitcoin mining is not so simple. It’s quite a radical change, which will require every user of software updates, i.e., hard forks, which is very unpopular in the community. If a large number of users will not agree to the proposal, a Bitcoin can be divided into two different cryptocurrencies. It thus appeared
Bitcoin Cash – due to disagreements related to the course further development of Bitcoin.

However, it may still be too early to talk about what the users want, even though the idea about the change of algorithm has caused a lot of controversy. And since Bitcoin is a decentralized system, the opinion of users is crucial. While Dubrovsky argues that there is no choice – the community needs to make changes.

«I think it will be difficult, but what we offer is not just improvement,» he said. «Something like this needs to realize if cryptocurrency is going to be really decentralized and be used for the safe storage and movement of trillions of dollars.»

Thus, one of the main goals PoWx is to work with the Bitcoin community, to convince him to accept the change.

These efforts have begun to bear fruit – Bitcoin Core developer Luke Dasher (Luke Dashjr) and founder bitcoin.org Cobra has already endorsed the purpose of the Fund. These two influential figures had previously made
to modify the algorithm and to prevent the dominance of the Chinese miners in particular Bitmain.

Finally, the question arises, whether there will be mining again centralized, even after the change the PoW. However, Dubrovsky argues that this is unlikely.

«It is unlikely that OPoW can ever lead to the same level of centralization that we see today,» he said.

However, he is struggling with a realistic look at the problem, agreeing that it is unclear how it will work PoWx. And even if the Fund will succeed, Bitcoin could still face other problems in the future, as most of them are not technical in nature. Intermediate compromise solution for the update of the algorithm of mining and reduce the influence of large pools may be a Protocol BetterHash, development which involved Matt Corallo.

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