GIN swaps mining algorithm and exchanges
The price action in GINcoins has not been pretty to look at the past few days, and while this doesn’t make me nervous, the time calls for a closer look at GIN performance and development.
An unfortunate side-effect of the cryptopia hack has been the omission of the only centralized, in other words fast, exchange that GIN was trading on. While I’m personally happy with using the decentralized CryptoBridge exchange, particularly GIN saw it’s major volume traded on cryptopia. While GIN has no fault whatsoever in having been listed on cryptopia where user funds have potentially been stolen, GIN was to fault for only having listed on two small exchanges so far. At least, GIN has reacted fast on the liquidity shortage and has within days arranged a listing on crex24. While crex24 is also just a small exchange with questionable reputation, the team around GIN promised a major exchange listing would follow before the end of QII, solving any current or future liquidity bottlenecks.
Another development that has impacted the price of GINcoins more severely, is the increase of mining power unsustainable since being the most valuable coin remaining on a Lyra2Z hashing algorithm. The problem arose when Zcoin forked their network to a new hashing algorithm in December last year and for-profit miners were pushed to use their specialized mining hardware to now mine GIN. Their hardware was not fit to mine the more valuable Zcoin on the new hashing algorithm, and thus resorted to mine and sell daily profits in GIN. The price pressure weighed heavily, and GIN declined from a December-high of 0.0005 BTC to a new all-time low at 0.0002 BTC.
Again, the team behind GIN reacted quickly and rolled out a new hashing algorithm pioneered by veil, who went live just a few days ago. However, GIN didn’t resort to simply update its algorithm and have the miners get back to business, they also implement changes to their blockchain trying to make it as secure as Bitcoin against 51%-attacks. By using the Komodo Delayed Proof of Work, which is in effect a “proof-of-bitcoin” via the op_return function, GIN is hashing a backup state-of-the-blockchain in the world’s most powerful computer network in existence: Bitcoin. A reversal of transactions and successful attack within GIN is hereby reduced significantly.
While “proof-of-bitcoin” promises incredible security right now, I’m not sure how Bitcoin core developers will react to the increased demand for its blockchain space.
As Lopp and Casatta point out on twitter, op_return functions can be considered as spam, with core developers drastically limiting this function in the future. Possibly, smaller blockchains would be forced to look for alternatives to this security utility yet again.
I think if it pays the fee it's not spam, however @VeriBlock made about 1 million bitcoin tx with op_return from the 1st of December 2018, they call Proof of Proof but is it more Proof of Spam? Why more than one tx per block? https://t.co/As40AAr57E— Riccardo Casatta (@RCasatta) January 5, 2019