Sia Descends Into a Game of Thrones as Devs and Miners Go to War – Trustnodes

Sia Descends Into a Game of Thrones as Devs and Miners Go to War


Sia, a pop named decentralized cloud like storage network with a market cap of around one billion dollars, has suddenly descended into chaos after Bitmain, the biggest crypto mining manufacturer, announced on January 17th this year a Sia ASICs Antminer A3 that was available immediately for shipping within ten days.

All of it is now sold out, with new units already shipped as shown by a number of online shared images from Sia miners.

That is to the chagrin of Nebulous, a VC funded and incorporated company which hires all of Siacoin’s developers. A company co-founded by David Vorick, its current CEO, who to bitcoiners might be better know as Taek42 due to his very vocal small block arguments seemingly passionately made while unbeknown to many that he was an altcoin developer.

Nebulous announced Obelisk during June last year, with Obelisk so being a wholly owned subsidiary of Nebulous having the sole purpose of “releasing a 28nm, full-custom ASIC [which] will be a complete package, similar to an antminer,” Vorick said at the time.

Obelisk sold in a pre-order some 3,598 units by the 24th of November 2017, with another pre-sale opened on the 30th of December 2017, estimating a shipping date of their ASICs by August this year.

However, the Bitmain/Antminer announcement might make all of those pre-orders in effect worthless for customers who bought, although Nebulus presumably has already received the hard cash and might not necessarily be affected.

A surge in Sia’s hashrate leads to one pool controlling 62%.

You all know the basics of Proof of Work mining. It’s a ruthless zero sum game that can be extremely profitable or can make you very much penniless.

That’s because in order for the protocol to keep coin supply constant, they have to take into account the added computing power. Thus if say 50% more computing power is added, your revenue goes down by 50%.

To simplify with some hypothetical numbers, if you thought last year the Obelisk ASICs was a good buy at say $1,000 because you calculated the Return on Investment (ROI) to be say $5,0000, then this year you might think it is a terrible purchase because the new calculated ROI, after so much more computing power has been added, might be $50. A loss of almost all your investment. So showing in a fine form the nature of risk taking in a pure free market like mining.

By contrast, those who managed to get their hands on a Bitmain Sia ASICs are now saying they are earning $400 a day or so on a hardware priced at just $2,000, showing the incredible potential profits to be made and the reason why it sold out so quickly.

However, what if you could just fork out your competitor? What if you could make this new reality sort of go away by soft-forking or hard-forking and so go back to a nicer time when you didn’t really have to think of free market forces?

“We did add an extra feature to the [Obelisk ASIC] SC1 unit that would allow us to invalidate the Bitmain hardware without invalidating the SC1,” Vorick says before further adding:

“The community would need to choose to adopt a soft-fork (it’s not something we could just magically activate, we have to change the hashing algorithm slightly), and then we could get rid of this cycle of Bitmain hardware.

Of course, they could just create another round of hardware (likely taking ~3 months). And, it would hurt Bitmain customers more than it would hurt Bitmain. Bitmain has already sold around $20 million of non-refundable hardware. They have made their profit, and a soft-fork wouldn’t change that.”

With just a little code change, Nebulous’ Obelisk could invalidate all that computing power, giving priority to their own hardware once it’s shipped.

But the move appears to be highly controversial, opening a rift within the Sia ecosystem where the now familiar propaganda tactics seem to once more be appearing.

Many could lose plenty. And by many we don’t mean Nebulus or Bitmain, both of whom have presumably already received the cold cash, but the many customers who bought from either or both. An explosive combination that could burn the entire project.

“We have considered continuously the best way to finance Nebulous,” Vorick says before further adding:

“We thought Obelisk would be a good route. Moderate margins and high sales would have given us enough to expand the team comfortably, but that hasn’t worked out so far.

We have thought about selling siafunds, though at this point we’re not comfortable with the regualtory risk we’d be taking on.

There’s also the option of hardforking in like 1 billion or 2 billion siacoins, directly into our wallets, and then selling like 1 million a day to fund our operations.

We could even construct the hardfork so that we only get 1 million per day for 3 years or something. This would give us enough to double or triple the size of our team, is a negligible amount of inflation, and then we could have a large operating budget. That option I think also carries regulatory risk.”

He later says that was just publicly thinking out loud and not a serious consideration, but how to incentivize developers, keep them incentivized and, most importantly, how to align their interests with those of the entire network remains very much an open question in this space, and might perhaps be one of the most pressing question if we discount the obvious free market solution.

With an anti-capitalist fork now seemingly pushed through in the name of the “community,” some of that very community has taken it upon themselves to maintain a non-forked client.

“My fork is about implementing some different ideas in the codebase,” a seemingly Sia coder says before further adding:

“The fact that Sia could migrate to Nick’s [soft-fork] codebase and thus rescue the current Obelisk situation and the fact that A3s could point at my fork and not be bricked would be opportune…

There are currently two of us working on it. We have plans to hire a team and handle the exchange funding issues.”

The two teams, thus, might have to compete in the open free market, with individuals freely choosing what direction they prefer. But for a fairly small coin, known to very few in a niche within a niche, the rift is not without risks.

That’s because although most of this space has seen a slide recently, in a sea of coins and tokens what might be perceived as mismanagement could be punished significantly.

Sia’s recent market cap.

Yet, it may be that the only way to prevent any abuse of power, whether by developers, miners, or anyone else, is to fork. With the market so left to decide.

Which could mean this is but the beginning of clones within clones and very much a new reality of open source crypto or token projects.

But could in all this complexity simplicity be lost? Or is that not a choice, but very much a necessity? Time will tell us all.


Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>