I've heard it argued that when a mining algorithm is prone to hardware specialization, the centralization that introduces (e.g. one factory producing 25% of all ASICs) is a security risk.

I'm wondering if there's also a security benefit to hardware specialization: Since the amount of on-demand computation available to purchase may vastly exceed the amount of computation going into mining a cryptocurrency, is there a risk of someone executing a 51% attack by briefly renting an amount of computation greater than the network's?

If that's a significant risk, does hardware specialization mitigate it by increasing the miners' computing power relative to the power of general-purpose on-demand computing?

1 Answer 1


Does hardware specialization provide security against 51% attack via on-demand computing?

It depends on what hardware the on-demand computing is offering. Hardware specialization might make a cryptocurrency less vulnerable to attack from inefficient on-demand hardware, like a botnet. But as hardware becomes more specialized, the on-demand hardware leasors tends to upgrade their hardware to stay competitive.

Keep in mind that the effectiveness of one's mining is relative to the total hash power of the network. If everyone on the network doubles their hashing power, everyone will continue earning the same # of coins after the difficulty adjusts.

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