Can IPFS drive hard disk mining to become an Ethereum graphics card-level opportunity?

On April 16, 2020, the first World Digital Mining Conference, referred to as the World Mining Conference, was officially launched. For five consecutive days, nearly 70 founders and heads of leading cryptocurrency mining and financial service institutions held in-depth exchanges. This was a grand mining conference that looked forward to the future in the cold winter of the industry.

In the first session of Genesis Season on the first day, the special guest Shenyu, the founder of the world's largest mining pool F2pool and CEO of Cobo, put forward a point worth pondering: the most concerned opportunity of IPFS this year, here is a summary of the key points:

(1) This year, the Filecoin mainnet of IPFS will be launched

(2) IPFS may drive changes in the basic rules of Internet storage

(3) Filecoin may be an Ethereum-level opportunity

Filecoin, the most representative IPFS project, has officially announced that it will be officially launched on the mainnet at the end of July. It had already launched the testnet at the end of last year. The wolf is coming, the wolf is coming, the wolf is finally coming.

Looking at the top 10 market capitalization rankings on Coingecko, 5 of them are POW main chains, but their market capitalization accounts for more than 80%.

Research the consensus mechanisms known in the market, there are about 30 kinds: POW, POS, dPOW, DPoS, PoA, PoWeight, PoR, PoET, PoC, etc. (For a detailed introduction to the consensus mechanism, see "ConsensusPedia: An Encyclopedia of 30 Consensus Algorithms" by Vaibhav Saini).

Among them, there are mining types that use computing power competition as a "fair competition" mechanism: POW, PoC, PoBurn, etc.

Non-mining types that use election, weight, staking, etc. as a "fair competition" mechanism: PoS, DPoS, PoA, PoWeight, PoR, PoHistory, PoSV, PoImportance, PoI, BFT, dBFT, RAFT, PoB, etc.

Other hybrid consensus mechanisms: dPoW, PoActivity, PoTime, PoExistence, PoR, DAG, etc.

From the above, we can see that the "massive resource consumption" of mining has become a problem that needs to be overcome to ensure the security of the blockchain. More consensus mechanisms are trying to ensure fairness and security by optimizing the election method.

Consensus community of consensus algorithms: PoW > PoS (including optimized consensus DPoS, etc.) > PoC.

But for believers in mining, we all believe that necessary resource consumption is the basis for ensuring network security. When focusing on the mineable consensus mechanism, it seems that we only find PoW, PoC, and PoBurn.

The two largest mining leaders BTC and ETH 1.0

Both BTC and ETH (1.0) use PoW mining. The difference is that BTC is based on SHA256, and ASICs quickly emerged and dominated the market, forming today's arms race; ETH1.0 uses Equhash and relies on lazy GPUs, which has a certain degree of ASIC resistance.

PoW, the full name of Proof of Work, is proof of work.

Bitcoin/Ethereum, as well as most public chains or virtual currencies, are based on the PoW algorithm to implement their consensus mechanism. That is, the distribution of currency is determined based on the effective work contributed by mining. Mining under this principle is the process of computers constantly looking for Nonce values ​​and calculating Hash values ​​through exhaustive methods. Whoever finds it first will succeed in mining.

According to public information from famous mining pools such as F2Pool: Currently, 87.31% of Bitcoin is in circulation, with a market value of 132 billion US dollars, a daily output of 12.97 million US dollars, and a current difficulty of 14.715214T. The next difficulty is expected to be 15.96T (+8.44%). The greater challenge lies in the upcoming halving. It is expected that after the halving of Bitcoin in early May, the old Bitcoin mining machines will face a shutdown wave, and the S19 series will become the main model.

According to public information from famous mining pools such as F2Pool: Currently, Ethereum has an inflation model with a market value of 20.3 billion US dollars, a daily output of 2 million US dollars, and a current difficulty of 2206T. The challenge for Ethereum lies in the gradual elimination of 4G graphics cards this year and the uncertainty of the transition to POS in the future.

PoS represented by ETH2.0, Ripple, EOS, and Little Rabbit

ETH2.0 will abandon PoW and fully adopt the PoS consensus mechanism to improve its TPS performance to adapt to the technical indicators required for the development of public chains; Ripple uses BFT (Byzantine Fault Tolerance) consensus, which is usually used in private networks and permissioned networks. EOS uses DPoS; XTZ uses PoS consensus.

Storage mining or PoC represented by Filecoin, BHD, and Mass

The PoC consensus algorithm was proposed as early as 2014, using the storage space of the hard disk as the computing power standard for mining. Currently, there are two types of storage mining or PoC: one is the incentive layer Filecoin on the upper layer of IPFS. The second is to follow the surface meaning of the capacity consensus and really use the hard disk capacity to measure the computing power, such as BHD and Mass.

The consensus used by Filecoin is actually called PoSt, which stands for Proof-of-Spacetime. The special feature of Filecoin's storage mining is that FIL tokens are required to store or call data, which gives storage computing power "usefulness". Mining based on the PoSt mechanism is mining that invests a lot of storage space (hard disk) and bandwidth resources.

The storage capacity, or computing power, used by BHD and Mass is the same as PoW computing power. You only need to prove that you have this computing power to get rewards. To some extent, it is a "consumption" of resources to ensure the security of the network.

The PoC consensus was proposed as early as 2014. Why would it be proposed again at this point in 2020 to create opportunities for Ethereum graphics card mining?

1. All early PoC consensuses were based on capacity, that is, computing power. There is a core technical blind spot - brute force attack (using powerful computing power to simulate storage space to unfairly obtain rewards), which forms a ceiling bottleneck for the development of all PoC projects, causing ZJ disk to consume PoC technology hot spots and gradually reduce practitioners' attention to PoC.

In early 2017, the Mass paper appeared, claiming that they had solved the PoC brute force attack problem through secondary submission. After development, Mass was launched on the mainnet in 2019. At this point, Mass has optimized and formed a relatively complete PoC protocol.

2. Another reason to focus on storage mining coins in 2020 is the launch of the Filecoin mainnet. Filecoin releases about 400,000 FILs every day, and the current Gate BitFIL price is around $6. According to this forecast, its daily output is about $2.4 million, which is equivalent to the output value of ETH mining. As Shenyu is concerned, we believe that the launch of such a large-scale project mainnet may bring about the same opportunities, and many projects will take the initiative to undertake hard disk mining computing power, that is, Ethereum graphics card mining level opportunities.

The wolf has been crying wolf for two years, and it has been delayed several times. Everyone’s dissatisfaction with the Filecoin project’s delay also reflects everyone’s expectations for it. Among the consensus algorithms that can be mined, except for POW, perhaps only POC can be paid attention to this year.