Several of the investors we have been speaking with about XTend Online’s exciting new revolution in mining technology have asked about the performance of our Hyperminer, the world’s first Advanced Mining Acceleration Platform (AMAP) under change of algorithms. One in particular was curious to know how we would respond to ProgPOW, as there is currently a debate on the Internet as to whether this should be adopted as a replacement for Ethash in the Ethereum network. As we have recently done a report on the Monero Bulletproof fork in October and showed that it had essentially no impact, it seemed logical to take some time out of our schedule to take a look at this upcoming algorithm.

Part 1. The Rationale

In doing so, we started by looking at the Github repository, and were immediately attracted to the section about the Rationale for PoW on Commodity Hardware. This is a hotly debated topic in the cryptocurrency community, and thought we would add our comments on what the ProgPOW team got right in this report, and what they have misrepresented. They list 5 reasons for explaining why commodity hardware is better that customized mining hardware. These are:

No natural distribution: There isn’t an economic purpose for ultra-specialized hardware outside of mining and thus no reason for most people to have it. No reserve group: Thus, there’s no reserve pool of hardware or reserve pool of interested parties to jump in when coin price is volatile and attractive for manipulation. High barrier to entry: Initial miners are those rich enough to invest capital and ecological resources on the unknown experiment a new coin may be. Thus, initial coin distribution through mining will be very limited causing centralized economic bias. Delegated centralization vs implementation centralization: While pool centralization is delegated, hardware monoculture is not: only the limiter buyers of this hardware can participate so there isn’t even the possibility of divesting control on short notice. No obvious decentralization of control even with decentralized mining: Once large custom ASIC makers get into the game, designing back-doored hardware is trivial. ASIC makers have no incentive to be transparent or fair in market participation.

Let’s take each of these in order.

No natural distribution

The first contention is that there is no economic purpose for specialized mining hardware and thus no reason for most people to have it. While this is true, there is never a reason for anyone to have hardware unless they have a purpose for it. The authors of this report have somehow implicitly decided that possession of high performance video cards does not count as specialized hardware, and yet how many people other than miners actually have a dozens of high end video cards lying around to build mining rigs? It is true that that there is a small contingent of sophisticated gamers who use PCs for that purpose and could (emphasis on could) also mine crypto, but the truth is that this rarely happens in practice. The vast majority of video cards used for mining today were purchased as an investment specifically for that purpose.

XTend Online has studied this market in detail, and like it or not, someone who buys a dozen top end 2080’s is doing this specifically to gain hashing power for mining. They are not running a gaming café and mining in their spare time. These people will happily buy any equipment that gives them ROI. There is no reason to give nVidia and AMD a pass on being called specialized hardware. The real difference between nVidia and AMD is not “alternative use” as the authors claim, but the fact that nVidia and AMD are widely available through distributors and are viewed as being trustworthy.

Bitmain, on the other hand, has demonstrated all the worst tactics of a Chinese company (product dumping, preferred availability to customers with special relationships, shipping used equipment, etc.) This naturally makes people suspicious. But it is important to keep focused on the real problem – the culture of Bitmain and other Chinese ASIC manufacturers – and not try and obscure it through an argument that doesn’t actually exist. There are many honest equipment manufacturers entering the mining market who do not operate by these questionable tactics.

Score for ProgPOW: 0 pass, 1 fail

No Reserve Group

This argument fails on 2 levels. First, this fails on a purely pragmatic basis. Exactly who do the authors of this paper think are going to jump in at a moment’s notice when a coin price makes it attractive for manipulation? This argument might make sense if we were talking about CPU mineable coins and you could start mining by downloading an app, but nobody even pretends that is what this market is all about. All of these algorithms, including ProgPOW, are designed to be easily implemented on GPUs, and as we said above, these are specialized hardware devices for all intents and purposes. Nobody has high end graphics cards lying around available for mining that they can simply spin up on demand. It is convenient for the argument to be able to lump GPUs and CPUs together, but anyone who has ever tried to install a GPU miner knows that this is not a simple task. People who know how to do it, know specifically because they are miners. There is no reserve group of high end GPUs waiting to jump in.

Next, there is an unstated, implicit assumption in this argument, and unfortunately it is an assumption that just happens to be wrong. The group assumes that all specialized hardware is only useful for a specific algorithm. But the very existence of GPUs disproves their argument. GPUs are an example of specialized hardware that can be quickly repurposed from one algorithm to the next, so while there may not be an idle reserve group, GPU miners could be pulled away from other coin to a more attractive profit margin. Thus, the authors incorrectly state that this restriction is on “specialized” hardware, rather than what they correctly mean, which is “non programmable” hardware. The XTend Online Hyperminer, the world’s first AMAP, is also a completely programmable piece of specialized hardware, just like a GPU, that allows a “reserve group” in every way that today’s GPU cards allow a reserve group. That group is the other miners that will switch coins.

Score for ProgPOW: 0 pass, 2 fail

High barrier to entry

This is really a stretch. As much as I respect the ProgPOW team, they are really being disingenuous here. A high end GPU suitable for mining today is on the order of $1000. A machine from one of the ASIC manufacturers is also currently on the order of $1000. If ASICs represent a significant barrier to entry, so do the mining algorithms which are optimized for GPUs. Again, if the ProgPOW authors were specifically trying to prohibit the use of GPUs and only concentrate on CPUs, they might have an argument here. But even they admit this is not practical.

The other thing that isn’t practical? Trying to change the laws of the marketplace to explain how the entry cost of high end GPUs are lower than the entry costs of specialized mining hardware. And let’s not forget, the XTend Hyperminer is an example of specialized mining hardware that can be repurposed, so its lifetime is every bit as long as a GPU. You don’t need to throw it away when a new ASIC comes along. You just switch to another algorithm if it is not competitive. The argument about entry cost is just silly given today’s realities.

Score for ProgPOW: 0 pass, 3 fail

Delegated centralization vs implementation centralization

This argument doesn’t even support the ProgPOW authors’ own position. I can’t imagine what was going through their head when it was written. In order to make this argument, they stealthily switch from talking about specialized hardware to “hardware monoculture”, hoping the reader won’t notice. Unfortunately, we noticed. There is no real possibility of a hardware monoculture developing at this stage. While Bitmain currently has around 70% of the market for SHA256, they have only a very small percentage of the market for other coins, such as Ethereum where ProgPOW is currently aimed. Further, there appears to be no threat on the horizon of a hardware monoculture arising for Ethereum from anyone. In contrast, what genuinely does exist in the market already today, is a hardware diculture, shared between GPU providers nVidia and AMD. And all of the arguments they make against a monoculture, can also be made against the existing diculture. So the whole thing is actually kind of ridiculous the way it is framed.

Score for ProgPOW: 0 pass, 4 fail

No obvious decentralization of control even with decentralized mining

Finally, after all of the above, we get to the single argument from the ProgPOW team which actually could be a problem. ASIC manufacturers *could* put in back doors. It isn’t a problem today, and they give no evidence anyone is even considering it, but the fear that someone might do it makes it worth considering. Of course, nVidia and AMD could do this as well, as could Intel making general purpose CPUs, so there is really no way around the position, other than trusting that hardware manufacturer’s won’t do it. So it comes down to the fact that the ProgPOW team may not trust Bitmain. I can’t necessarily blame them, but don’t tar and feather everyone for this.

That aside, let’s examine this more closely. What exactly would the back door do? Siphon off hashing power for the manufacturer? Slow down some units and speed up others in order to bias the network? It is worthwhile to consider that something like this may be a liability, but it seems the important thing to do about it is to start a discussion on the types of misbehavior a manufacturer could commit, and then to design general ways of checking for this to police the manufacturers and keep them honest. Still, overall we have to give credit to the ProgPOW team for pointing this out and making it part of the dialog. Issues of centralization go to the core of what the blockchain is all about. Nobody benefits in the long run by destroying that attribute.

Score for ProgPOW: 1 pass, 4 fail

So all told, only 1 out of 5 of the reasons for ProgPOW is actually valid. The others may be able to provide some support if they are reworded to correctly specify the issue that they are targeting, but it will necessarily be a much more limited argument. As someone who has written patent applications before and knows how to identify the problem you are solving, I can tell you that anyone making a critical analysis of the justifications in this paper would never let it pass. If I was their professor and this was a class assignment, I would give them a C- or a D and ask them to try and do better next time.

With all of this in context however, it is ultimately up to the community whether they wish to adopt ProgPOW or not. Such decisions are often made on emotions and value judgements rather than rational facts and debate, so let’s just assume that this is adopted and get on with the purpose of this essay, which is how the XTend Hyperminer AMAP is expected to perform. The great thing about this whole industry is that in the case of disensus, you simply fork and let the market decide.

Part 2. The Algorithm

Now we get to the really interesting part of this analysis. Particularly, what do we anticipate the hash rate to be for the XTend Hyperminer on ProgPOW? Since we don’t currently have a Synoposis licensed workstation available to do a full simulation of the algorithm over a couple of weeks, we are going to have to be a bit less rigorous. Specifically, we are going to look at what the algorithm changes vs. the existing Ethash algorithm, which we do know the performance of. To do this, we are going to concentrate on the differences between the progPowLoop and the existing ethash loop, the initialization routines will have only a secondary impact on hashrate, and since this is only an estimate, we can afford to ignore them for the moment.

In the main loop if ProgPOW, we start by creating 16 lanes, and for each lane, we do a 128 bit read from the DAG. Since all lanes access memory contiguously, we can see that the only net effect is to increase the read on the DAG from 128 bytes in Ethash to 256 bytes under ProgPOW. Thus, our first observation is that we can expect our performance to decrease from the 1.04 GHash per second that we expect on the HPC-100 PCIe card with ethash, to approximately 500 MHash per second on ProgPOW.

Next we see that we go through a progPowInit() function, which we can preload, so there will be no impact. We then go through the biggest computational change to the algorithm, which consists of a sequence of 12 – 20 accesses to a small 16 KB block, and 20 calls to a random math function, which requires computing a modulo 11 operation, and then one of 11 very simple operations. All of these would be minimal. The big CPU hog is a call to generate a random number 52 times during the processing of each lane. These calls would be extremely expensive and represent the bulk of the expensive CPU operations if we actually had to do them.

Luckily, all of the above is constant over the life of prog_seed, and therefore simply represents a static code change that can be completely precomputed and executed in minimal time. It will need to be updated every time prog_seed changes, which is currently once every 50 blocks, or about 12.5 minutes. In order to implement this algorithm, tools on the host CPU will need to be developed to precompile this code every period and download the optimized program to the Hyperminer card.

As the computation of each of the 16 lanes of ProgPOW can be completely parallelized, and the precomputation of the peudo random sequences means that only a code update is required rather than huge increases in computation, it seems that the entirety of the additional complexity of ProgPOW vs. Ethash will be completely hidden by the increase in the DAG access time.

We can thus predict that a single Hyperminer HMC-100 PCIe card from XTend Online will have performance of approximately 50% of the expected performance of Ethash on any coin that elects to implement ProgPOW. At current speeds, this means a hash rate of 500 MHash/sec for ProgPOW running on an HMC-100 PCIe card, and approximately 2 GHash/sec for the industrial HMI-400 unit.

About XTend Online’s Hyperminer:

In development for over a year, the XTend Hyperminer is a radical new, programmable mining architecture that will redefine digital mining. It is as fast as an ASIC, more programmable than a GPU, and without the inefficiencies of FPGAs. The configurable fabric was created specifically for the industry by two Silicon Valley veterans. Chris Ziomkowski is a Caltech graduate with a specialty in massively parallel processing, and Rudolf Usellmann is responsible for creating much of the technology used in FPGAs.

Together, they have created the next generation in digital mining equipment, called the Adaptive Mining Acceleration Platform, or AMAP. XTend’s AMAP Hyperminer is a programmable mining fabric in the form of a supercomputer on a chip and delivers unprecedented performance at an affordable cost. An AMAP Hyperminer can simultaneously mine multiple coins with different algorithms, and can be upgraded in response to forks and algorithm changes in a matter of milliseconds.

Example performance for an AMAP Hyperminer:

Ethereum (Ethash)

HPC-100 ePCI card: More than 1 GHash/sec

HMI-400 Shoebox: More than 4 GHash/sec

Monero (Cryptonight v8)

HMC-100 ePCI card: 19 KHash/sec

HMI-400 Shoebox: 76.8 KHash/sec

XTend Online is currently actively seeking funding to begin tapeout of this architecture for manufacture in 2019. For more information about investing with XTend Online, please contact the Company at [email protected]