For the last few years the Scrypt mining ecosystem has been dominated by Bitmain and just as it looked like others were beginning to catch up, the gap has widened once more. Last week, abruptly and without warning or even acknowledgement, Bitmain more than halved the cost of their most popular Scrypt ASIC, the Antminer L3++ from ~$200 to $65.
One reason behind such a drastic could be that Bitmain have lowered the price in an attempt to rapidly sell off their remaining stock, as they will soon have a more efficient ASIC ready for sale. This would follow the announcement of their new 7nm chip architecture that has just been released for Bitcoin last week.
While nothing is official it would certainly make sense considering Bitmain is not really competing with anyone else and had no clear incentive to reduce the price. However there may be other chip manufactures that we are not aware of, in which case this may be Bitmain’s attempt to make the first move and capitalise on their position as leaders in the market to stay ahead.
For consumers it means mining is becoming cheaper again to partake in and for the rest of us it means we may soon see a boost in hash-rate joining the network if new devices are indeed on their way. Innovation in Scrypt mining is certainly welcome and has been sometime coming.
An interesting side affect that may not be as obvious is that where the Litecoin Network had once been secured by close to $100m worth of mining hardware, it is now only secured by just above $30m or about 1% of market capitalisation. Compare that to bitcoin which is secured by about 2% of market capitalisation.
While these numbers seem small it is very much market dependant. $30m worth of hardware isn't available to just purchase on demand and because Litecoin is an incentive based model anyone wanting to invest that much would not make their investment back, especially if they were planning on attacking the network as they would have to bleed money mining nothing of value for an extended period of time. It would turn out to be a very expensive act to cause a minor inconvenience. 51% attacks may sound scary in theory but in reality for larger assets are not really an issue.
If new more efficient miners are on their way we would see huge demand from miners and this value of network hardware most likely increase.