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A WORD OF WARNING About CryptoNight ASIC Miners – ANTMINER X3, Baikal Giant-N, PinIdea RR-200

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You are probably aware of the wave of new miners coming to the market in the near future. Big ASIC manufacturers have decided to try their luck with the Cryptonight algorithm. As a result, we’ve got three new ASIC announcements happening in a span of a week: the ANTMINER X3, the Baikal Giant-N and the PinIdea RR-200.

As expected, ASICs feature insane hashrates compared to GPUs. For instance, one Antminer X3 hashes the same as ~ 100 AMD Vega GPUs while consuming ~ 50 times less power. The Baikal Giant-N and the RR-200 are a bit more modest by featuring 20 KH/s and 27 KH/s, respectively. This is still a lot compared to the 2 KH/s you can squeeze out from a Vega.

Here is what we know about the miners so far:

  ANTMINER X3 Baikal Giant-N PinIdea RR-200
Price: $3,000* $3600 USD $ 1740
Minimum order: 1 unit** 6 units 5 units
Hashrate: 220 KH/s 20 KH/s 27 KH/s
Power consumption: 500 W 60 W 350 W

(*) Price for Batch 3 that will be shipped before May 31; It goes down to $ 1900 USD for batch 4 that will be shipped before June 31.
(**) The maximum order quantity is 1 unit – they allow only one unit per customer

What we see here is a typical picture with Bitmain miners being the beefiest ones, however any of them is better ROI than any GPU if you want to miner Cryptonight.

So Far So Good, So what’s the Catch?

Eventually, Monero developers are not happy with the idea of their mining pools being invaded by ASICs. They see it as a violation of the decentralization principle:

For instance, a government could require these ASIC manufacturers to add a “kill-switch” which allows them to shut down a miner remotely or otherwise control it. This threat has the potential to destroy the whole network. In a similar fashion, governments could require miners to have a license to buy and operate ASICs, thereby confining ASICs to a certain group of licensed people. Furthermore, licensing could ultimately lead to blacklisting certain transactions, i.e., governments can require miners to not mine certain transactions, where disobedience would result in miners having their license revoked. By contrast, introducing a license to operate general purpose hardware is probably an infeasible endeavor.full article here

In order to prevent centralization, Monero developers have decided to slightly change their PoW algorithm every half year. The changes would be small enough to not be noticeable by non-ASIC miners and big enough to prevent existing CryptoNight ASICs from mining Monero.

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ASICs Won’t Be Able to Mine Monero

All of the above means that if Monero developers stay true to their statements, none of the mentioned ASICs will be useful for mining Monero once the Cryptonight PoW hash is changed. If manufacturers will decide to release a new batch of ASICs that is adapted to the change, those will only work until the next hash modification.

Here is what Riccardo Spagni, Monero lead developer, wrote regarding the Antminer X3:

Risks Involving Getting a CryptoNight ASIC

You probably know that Monero isn’t the only Cryptonight coin out there. Bytecoin, Aeon and Electroneum are only few of the many coins that you will be able to mine with the X3 in the case it will become useless with Monero.

That being said, there is no warranty that those other coins won’t adopt the same changes as Monero; Or at least, the most popular of them.

All of the three manufacturers have posted on their website that they accept no refunds. This means that even if their X3 miners will prove to be not compatible with some/most the coins they are advertised to mine, you will still not be able to claim your money back.

Regarding the less popular coins

You might say “screw the popular CryptoNight coins; I will buy an Antminer X3 and mine the small ones”.

According to MineCryptoNight, there are several coins that will give you a whooping $ 100K USD/year by mining them with an AntminerX3. I am talking about coins that have only 3-10 MH/s network hashrate. The majority of CryptoNight coins are actually small and are mined by a tiny group of people.

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So, what will happen if you will start mining those small coins?

The price of a product depends on its supply and demand balance. Let’s take the average unpopular CryptoNight coin as an example. Say, you’ve decided to mine the Intense Coin (ITNS). With the coin having a network hashrate of only 3.41 MH/s, your Antminer X3 will be cashing you ITNSs worth a whooping $ 8365 USD/month.

The issue is – the daily trade volume of the coin hovers around $ 2.600 USD. Can you imagine what will happen to the price of the coin once you will start dumping thousands of ITNSs worth $8365 into the market every month? What if a couple of hundred people with their X3 miners join you? What will happen to the price of the coin then?

In Conclusion

Everyone makes their own conclusions from this. Some people don’t read the main article where Monero devs explain why ASICs are a threat and criticize Monero for their decision. Others take the opposite side and accuse ASIC manufacturers of selling their used X3 miners to the unaware public to make some profit from those units while they can.

Personally I don’t take sides, though here is what I think: buying ASICs is always risky – you never know where the coin price and difficulty will be in a week, let alone in a year. Now, with Monero devs being against this ASIC, I believe that it’s even riskier to get involved into Monero ASIC mining by buying an Antminer X3.

Again, I am not taking sides in this and I am not giving any financial advice here – it is up to you whether you will take this risk or not. I am only sharing some relevant info in hope to help you to make a more informed decision.

Your opinions and comments are more than welcome 🙂 However, please avoid commenting any hate speech against either ASIC manufacturers or Monero because there is enough of that on Reddit and Tweeter. Thank you!

Thank you for reading. As always, your comments, suggestions and questions are welcome.

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