Was Monero’s PoW Change A Success?
(XMC, XMO and XMR)
Three and a half months ago, XMR changed their PoW algorithm in the hopes to prevent miner centralization on their network. By changing the mining algorithm, ASIC’s are now no longer able to mine the new XMR chain. To take this one step further, the hope is that mining companies will also stop developing ASIC’s for XMR completely because if they do, the PoW algorithm would simply be changed again.
So far, this tactic appears to be a success! If you look at XMR’s hashrate, you’ll notice a significant drop in April followed by a fairly even plateau. This strongly suggests that ASIC’s were being used to mine XMR starting way back in February 2018:
Also, the hashrate distribution seems to be evening out as well. This is a chart before the hard fork on April 6, 2017:
This is a chart a month and a half after the fork on May 19, 2018:
This is a recent chart from July 17, 2018:
As you can see, the last chart is a stark contrast to the hashrate distribution prior to the hard fork and definitely shows it more evenly distributed throughout the network. However an unfortunate side effect to the PoW change was that it gave birth to four forks of XMR, which raised a lot of questions:
- Who was behind these projects?
- Which exchanges would list them?
- Is brand confusion between all the forks and XMR a danger?
- Would the market actually choose ASIC friendly coins?
Well now that three and a half months have passed, we can definitely say that these projects are dead. Of the four, only two are currently being traded according to coinmarketcap. Let’s take a look at their volume as well as the level of activity on their githubs to determine whether or not these forked coins pose any real threat to XMR.
1. XMC and XMO Are Being Traded…Barely
Notice that both their volumes are very small. XMC has a volume of $106,000 in 24 hours while XMO has $15,000. Both these volumes (and also the price) pale in comparison to XMR’s volume of $38,000,000.
2. Their Githubs are Ghost Towns
As you can see, there has only been 1 commitment since Mar. 27, 2018 which really was just forking the monero-project. Since then, there has been 0 commits and 0 additional contributers.
Here you see XmanXU making several commits during the last week of March in preparation for the Hard Fork. But since then, the commits have been cosmetic i.e. just updating the description of the project and the README.md file.
3. Github SockPuppetry?
I decided to click on the last commit in May for XMO because the 1 comment stuck out to me like sore thumb. What I found was a random comment left by KPhilly cheering the XMO project on.
This definitely peaked my interest because it had “sock puppet account” written all over it. So I clicked on KPhilly’s github profile and lo’ and behold: an empty github profile.
KPhilly a.k.a. Kent Phillips’ github profile only had 1 day of public activity in June 2018, and all he did was create an empty repo calling it KPhilly/kentphillips. I checked out http://www.kentphillips.me/ (which is the website the repo points to) to learn more about our good ‘ol pal Kent. Turns out it’s just a dead website.
Then I decided to check out XmanXU’s profile, the github user who forked XMR to XMO.
Turns out he has 3 followers, all who’ve forked random projects like Viacoin and Digital Note but have done 0 work on them. I believe they forked these projects just so that the profiles wouldn’t look empty if someone came across them. In light of all of this, I’m fairly certain that XmanXu and XPhilly’s github accounts, if not all the accounts tied to them, are sock puppets.
The lack of commits to the respective repo’s of XMC and XMO mean that these projects are unmaintained. In fact, I doubt they were even serious projects. This then begs the question, why did they even fork in the first place?
My personal hunch is that they were used as a scare tactic against the XMR community for changing their PoW, as a hedge just in case people actually saw value in an ASIC friendly Monero chain, or as a quick cash grab as they dumped their forked coins (See XMC and XMO graphs above).
But one thing is for certain. All 4 of the projects born out of the XMR hard fork in April have become completely irrelevant.
I’ve personally been fascinated by XMR’s hard fork because there has been some discussion of changing BTC’s PoW algorithm for the exact same reason: To make mining decentralized. So far this has been met with a lot of resistance because of the potential dangers that could come with it. However, the discussion has revolved primarily on speculation and game theory.
Alternatively, XMR’s hard fork gives us live data on a network worth over $2 Billion in Market Cap with real miners and real ASIC’s and real block rewards that directly effect mining companies economically.
For example, it’s quite possible that four projects are created out of the PoW change for Bitcoin; just like there was for Monero. But it’s also possible that they become irrelevant just like how Monero Classic, Monero 0, Monero Original, and the other Monero Classic, have.
Does this definitively prove that XMR’s PoW change was a success and could/should Bitcoin pursue one itself?
I’m still not 100% convinced. It’s possible that mining companies could be in the process of developing ASIC’s for Monero’s new mining algorithm as we speak.
Also, some might argue that comparing XMR to BTC is like comparing apples to oranges. For example, let’s suppose mining companies were behind the XMR forks. They would probably throw actual developers behind the forks of Bitcoin should it go through a PoW change because of how foundational of a currency it is to the whole cryptoecosystem.
However, I must admit that the short-term effects are pretty compelling. The forked coins have become irrelevant and hashrate distribution in the XMR network is becoming more evenly distributed.