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Mining centralization is a big Bitcoin problem, and the development of ASICs is one of the main causes of this, but I haven't found a lot of discussion about changing the mining algorithm to a more ASIC-resistant one. Is this because there is some kind of contract between the big miners and the Bitcoin developers, to not change it ever? Or there is some work in progress?

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Aside from the forking problems that arise from trying to change the mining algorithm, ASICs are gaining a longer shelf life, allowing for more time to distribute mining equipment, ultimately helping decentralization.

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Short answer: no.

Remember, that it's not really the developers who decide. A mining algorithm change would mean a hard fork, which is an incredibly difficult task to pull off. The developers develop on behalf of the community, which is comprised of miners, exchanges, merchants, customers, and other types of developers. Each of these groups needs to take the needs of the other groups into consideration as well as their own. In general, the potential problems with a hard fork have outweighed the benefits of changing the mining algorithm in the eyes of each of these groups.

Also remember that the concept of sidechains is on the roadmap as a possible scaling option. Any of these sidechains could use whatever mining algorithm they choose, which would help to solve mining centralization in their own way.

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  • Sidechains are a means to experiment with new technology; they are not a scalability solution. Again: sidechains are not a scalability solution. They can add capacity, but in a way that is far worse than a simple block size increase (as they come with a huge degradation in security due to the SPV security of transfers).
    – Pieter Wuille
    Nov 9, 2016 at 4:35
  • @Pieter I've always viewed sidechains as a way to create special-purpose chains tied to the main one, and therefore take some of the future applications of Bitcoin off the main chain. What am I missing?
    – Jestin
    Nov 9, 2016 at 4:40
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    Unless your special purpose is so special that it is only useful for a small group (which is a terrible property for money), it will cause the same centralization pressures as the main chain. And even if that is the case, it's not a security choice a significant subeconomy should make. Use payment channels or brokers with proofs of reserve for scale. Use sidechains for experimenting without needing to first create a new currency.
    – Pieter Wuille
    Nov 9, 2016 at 4:59
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    Also, sidechains (at least, 2-way-peg merged mined sidechains) need to use a mining algorithm that have corresponding verification opcodes in the main chain. So if Bitcoin would softfork in an opcode to do 2wp verification for SHA256 and Scrypt chains, sidechains could only use those two.
    – Pieter Wuille
    Nov 9, 2016 at 5:06

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