This is a cross post from the Litecoin Talk forums which I thought might be worth discussing here, as MinCoin uses the same scrypt hashing algorithm as Litecoin.
The following I am going to quote is posted by a famous bitcoin developer, gmaxwell, he is one of the core bitcoin developers and suggest LTC should change it's proof of work function to avoid ASIC mining.
According to reports scrypt ASICs may soon exist, finally completely eliminating this feature distinguishing Litecoin from Bitcoin— at first LTC was supposed to be CPU only but that failed, then GPU only and thats failing.I never thought much of the goal here, but at least it was a distinction— if, IMO, a kinda dumb one. The thing I like least about alts is the lack of distinction and innovation they frequently suffer, and so being another asic mined coins but with different asics seems like such a waste to me.If the LTC community wanted it could change POW and the practice of being willing to change it would probably be a stronger protection for general purpose hardware than the use of any particularity or set of particular schemes could ever be. Though since (it seems to me) so much of the LTC community is miners the change would have to be to another CPU+GPU friendly one so the existing miners wouldn't be left out.There are a lot of options here— including different POWs already deployed other ALTs or something novel. What got me musing on this subject was the question of: If I threw out an alt that used ECDSA signature validation as its POW would someone write ultra fast GPU code for ECDSA (which would be very useful in helping to scale node performance, even in Bitcoin)?I suspect that if LTC doesn't change POW now that the introduction of fixed function hardware will mean that it never can. Perhaps its already too late, though I don't know: LTC has always advertised itself as being GPUASIC proof, and a violation of that is an outright bug, which arguably should be fixed no different than if it were possible to mine more than 84 million litecoins.Such a change could be made mostly seamlessly— a new version released, and a deadline for upgrade, not too unlike the Bitcoin 0.8 hardfork or the nversion=2 blocks. Existing miners could even use coinbase votes (indicating their ability to support the switch in the blocks they mine) to trigger the change so that it could be done in a way which is assured to not exclude too much of the existing hashrate (though, presumably, using a coinbase vote would fail if there are secretly large asic farms already). Miners would need to upgrade software, but they'd just have to update sometime before the switchover, no tricky synchronization would be required.I wonder what people think of this? Is this the sort of thing that could get near-unanimous consensus in the LTC community?
The short and skinny of the discussion is the potentially negative effect ASICs have on Bitcoin, and the "arms race" they have created. ASICs have put the power into the hands of the rich and powerful, which largely defeats the purpose of crypto-coins. Every day people have lost the currency war when coins can only be mined using incredibly expensive hardware.