Pow change and key reuse: typo/wording fixes, add dnaleor as part author

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title: PoW change and key reuse
summary: Monero will tweak Cryptonight, and how key reuse can compromise your privacy
tags: [monero, pow, cryptonight, asic, fork]
author: dEBRYUNE and the Monero project
author: dEBRYUNE, dnaleor and the Monero project
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* PoW change
Lately, a common reoccurring subject has been ASIC resistance and how we should react to any (potential) threat from ASICs. This blog post sets out our (somewhat) formal stance on ASIC resistance and our intention to maintain ASIC resistance by swiftly reacting to any potential threat from ASICs and condering slightly modifying the PoW at every hardfork.
Lately, a common reoccurring subject has been ASIC resistance and how we should react to any (potential) threat from ASICs. This blog post sets out our (somewhat) formal stance on ASIC resistance and our intention to maintain ASIC resistance by swiftly reacting to any potential threat from ASICs and considering slightly modifying the PoW at every hardfork.
An ASIC (Application Specific Integrated Circuit) is custom mining hardware that is specialized for a particular use. For example, Bitcoin ASICs are specialized to mine cryptocurrencies utilizing a SHA256 hash algorithm. Due to the fact that they are designed for a specific use, they will typically have a large performance advantage over hardware that is intended for general-purpose use like CPUs, GPUs, and even FPGAs. Thus, any newly developed ASIC will obtain a significant majority of the network hashrate and introduce centralization.
The Monero code was forked from the CryptoNote reference implementation. In the CryptoNote whitepaper (https://cryptonote.org/whitepaper.pdf), one of the identified deficiencies of Bitcoin is the Proof of Work due to its centralizing nature, as we will discuss below. In order to create a more egalitarian mining network and foster decentralization, the original CryptoNote developers created the Cryptonight Proof of Work function to "close the gap between CPU (majority) and GPU/FPGA/ASIC (minority) miners." While the CryptoNote authors admit that "It is appropriate that some users can have a certain advantage over others," they propose that "their investments should grow at least linearly with the power." Thus, it is recognized that ASICs may be an inevitable development for any Proof of Work. We also concede that ASICs may be inevitable, but we feel that any transition to an ASIC-dominated network needs to be as egalitarian as possible in order to foster decentralization. At this point in time, we suspect that any newly developed Cryptonight ASIC will not be egalitarian and will not foster a decentralized network.
The drawback of Bitcoin's (SHA256) proof-of-work system is the easy migration from CPUs to GPUs, to FPGAs, and finally to ASICs, where each step came with huge efficiency improvements. Thus, there is a large gap between CPU mining and ASIC mining, which resulted in ASICs being the only viable way to mine. In essence, this causes centralization, because only those with access to specialized hardware (ASICs) are still able to mine, and these typically come from one or very few manufacturers. Cryptonight (Monero's proof-of-work system) intends to close the gap between CPU and GPU, FPGA, and ASIC mining by using a proof-of-work system that is memory bound over a large amount of memory. As a result, ASICs get significantly more expensive to build. This proof-of-work system intends to foster egalitarian mining, which yields the following benefits: First, if mining is decentralized (because CPUs and GPUs are still usable for mining), it will be very difficult to pressure miners into not confirming a certain transaction, or otherwise act as a censor to the Monero blockchain. Second, it will lessen the pressure towards centralization of mining in large data centers (as can be seen in Bitcoin). Third, it is quite difficult for governments to regulate companies selling general-purpose hardware (as opposed to companies selling specialized hardware).
The drawback of Bitcoin's (SHA256) proof-of-work system is the easy migration from CPUs to GPUs, to FPGAs, and finally to ASICs, where each step came with huge efficiency improvements. Thus, there is a large gap between CPU mining and ASIC mining, which resulted in ASICs being the only viable way to mine. In essence, this causes centralization, because only those with access to specialized hardware (ASICs) are still able to mine, and these typically come from one or very few manufacturers. Cryptonight (Monero's proof-of-work system) intends to close the gap between CPU and GPU, FPGA, and ASIC mining by using a proof-of-work system that is memory bound over a moderate amount of memory. As a result, ASICs get significantly more expensive to build. This proof-of-work system intends to foster egalitarian mining, which yields the following benefits: First, if mining is decentralized (because CPUs and GPUs are still usable for mining), it will be very difficult to pressure miners into not confirming a certain transaction, or otherwise act as a censor to the Monero blockchain. Second, it will lessen the pressure towards centralization of mining in large data centers (as can be seen in Bitcoin). Third, it is quite difficult for governments to regulate companies selling general-purpose hardware (as opposed to companies selling specialized hardware).
Let's further discuss this last point. Specialized hardware will, most likely, only be designed by a few companies. As we can see from Bitcoin, the majority of ASICs are designed and shipped by Bitmain. As Peter Todd said:
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