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ASIC Mining leads to Miner Centralization - a potential threat to Incognito?

#1

From what I understand about ASIC processors…

  1. ASIC mining hardware is tailored to the type of operation done, making it significantly faster than using CPUs. In the context of mining, they offer a major advantage over traditional CPUs.
  2. If someone designs an ASIC processor for a particular application (like mining Monero), they can create a mining pool with higher block rewards than you could get as an individual miner (CPU).
  3. Such a pool should grow very quickly, possibly leading to a “51% attack” on the network.

This is a topic of discussion in the Monero community now:

  1. The top two Monero mining pools now control 60% of the network hashrate
  2. Monero has introduced the RandomX mining algorithm in an effort to block ASIC mining to prevent at “51% attack”
  3. The question is: how long will RandomX remain ‘ASIC-resistant’

Here’s some background reading:

Could this type of thing happen on Incognito? Can you run a pnode with ASIC processors?

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#2

Application-Specific Integrated Circuit (ASIC) is a device whose function is determined by design engineers to satisfy the requirements of a particular application. ASIC-resistant is a problem for Proof of Work since ASIC can be designed for a specific hash function. Incognito isn’t vulnerable to this type of attack because it uses Proof of Stake, so faster computation doesn’t affect block reward.

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#3

Thanks @dungtran :pray:

A couple other relevant notes after discussing w/ devs:

  • The Incognito chain requires a 2/3 consensus rather than simple majority, so for us we’re really talking about a “67% attack”.
  • PoS chains are ASIC-resistant, but they have other ‘mining pool manipulation’ issues. For example, if the required stake was $10,000-equivalent, users may prefer to stake smaller amounts through ‘staking pools’ like myconstant.com. If enough people do this, the staking pool could theoretically gain control of the network.

Someone on Twitter also mentions that sharding can make these problems worse:

  • On a normal PoS network, if total PRV staked = X, you need to stake (2/3 * X) PRV to gain control.
  • With state sharding, A new block can’t be created until all the individual shards reach consensus, so theoretically compromising one shard would cause the whole network to stop. So only (2/3 * X/N) PRV stake is needed.
  • To address the above, Incognito miners are assigned to shard randomly at the beginning of each epoch.
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#4

The staking pool of Constant already reaches 450k PRV staked but I don’t think that any staking pool could gain control of the Incognito network because:

  1. Incognito only requires an amount of 1750 PRV to stake one node, the staking pool works by staking a number of nodes in accordance with the PRV received. However, the nodes are selected randomly into shards and the staking pool has no authority on choosing which shards for their nodes to be in, and as you mentioned the nodes are swapped out of each shard committee every 4 hours.

  2. Theoretically, a staking pool can cause the whole network to stop by stopping one shard only if 2/3 of the nodes of that shard happens to be their nodes at the same time and more than 1/3 of them refuse to reach consensus at a block.

Not sure if my understanding is correct or missing anything? @dungtran

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#5
  1. Note that: by now only 4 committee members to be swap out every epoch (~4 hours).
  2. Correct, a shard is blocked if it does not collect enough 2/3+1 votes.
#6

all the nodes from the single staking pool should be active at the same time to represent maybe a problem. That makes the quantity of node required to do such an action even bigger i guess; because, on incognito, nodes are selected randomly.

#7