Bitcoin Wiki:Proof of work change hard fork
Proof of work change hard fork
Changing the proof of work algorithm has been planned as a solution to ASIC mining centralization since as early as 2012 when Butterfly Labs first announced their intention to produce the first mining ASICs. It is expected that by changing the PoW, the mining economy will be given a "restart" back to its original decentralised state, and the current centralised miner (Bitmain) will significant enough financial loss to deter future centralisation of the new algorithm.
Purpose of proof of work recap
The purpose of proof of work is to ensure that the next block is randomly determined from a large pool of entities, without any centralised authority nominating such entities.
Problems solved through a PoW change
- The goal is to restore mining decentralisation.
- By changing the PoW, Bitmain would suffer financial loss.
- Any competent and benevolent manufacturing competitors to Bitmain would not suffer financial loss.
- Small miners would be able to mine the new algorithm using different hardware, likely at a higher network percentage than with Bitmain-issued hardware.