Why proof-of-work still matters
Bitcoin proved that proof-of-work secures a chain without trusted validators. The trade-off is energy use — and the centralisation that follows when specialised hardware (ASICs) makes home mining unprofitable. Monero answered with RandomX, a CPU-optimised PoW that keeps GPUs and ASICs at a disadvantage. XELIS answers with XelisHash v2.
The design goal
One sentence: make the cost-per-hash on commodity hardware (CPUs, GPUs) close enough to specialised hardware that ASIC development isn't economical.
The lever is memory. ASICs win when an algorithm can be implemented as a tight arithmetic circuit. Once you require large, random reads from a few hundred megabytes of RAM, you've eliminated most of the ASIC's silicon advantage — because the ASIC still needs DRAM, and DRAM costs the same to everyone.
How XelisHash v2 works (at a high level)
- Scratchpad initialisation. A multi-hundred-MB buffer is filled deterministically from the block header. Generating it is itself expensive.
- Random walk. The miner walks through the scratchpad in a data-dependent order, mixing values with a chain of hash and integer operations.
- Final hash. The last state is hashed to produce a candidate. If it's below the network difficulty target, the block is found.
Because each step depends on the previous one (sequential, data-dependent), parallelism within a single hash is limited. Because the scratchpad is large and random-access, you can't replace DRAM with on-die SRAM cost-effectively.
What changed from v1
- Larger scratchpad. Pushes the memory bandwidth ceiling higher.
- Re-tuned mixing primitives. Closes shortcuts that early FPGA prototypes exploited on v1.
- Better GPU performance balance. v2 narrows the gap between high-end CPUs and consumer GPUs so neither dominates.
What miners should actually expect
- Modern CPU (Ryzen 9, Core i9): productive solo or pool mining, low power per hash.
- Mid/high-end GPU (RTX 4070+, RX 7800+): generally the best $/hash with current miners.
- Older hardware: still works; just slower. Useful for testing or running a small contribution.
- Cloud / VPS: almost always unprofitable. ToS on most providers also forbid mining.
For a comparison of where each shines, see GPU vs CPU mining.
Why this matters for privacy
Privacy-coin networks are most resistant to capture when mining is widely distributed. A protocol with mandatory privacy but ASIC-dominated mining concentrates blockspace control in a handful of farms — bad for censorship resistance. XelisHash v2 keeps the mining base broad so that no single actor can credibly censor or reorg the chain.
Honest caveats
- "ASIC resistance" is an arms race. If XEL price rises enough, an ASIC may eventually become economical — at which point the community can hard-fork the algorithm (v3, v4) as Monero has done with RandomX.
- Memory-hard algorithms have higher power-per-hash than tuned ASIC algorithms. The trade-off is decentralisation, not efficiency.
- Mining alone doesn't make the chain private — that's the job of confidential transactions and ZK proofs.
Frequently asked questions
What is XelisHash v2?
A memory-hard proof-of-work algorithm designed for the XELIS Layer 1. It deliberately resists specialised mining hardware (ASICs) by requiring large amounts of fast RAM.
Can you mine XELIS with a CPU?
Yes. XelisHash v2 is designed to be efficient on commodity CPUs and GPUs. It's not the most profitable on a kilowatt basis vs a tuned GPU rig, but it's accessible to anyone with a modern computer.
Are ASICs really impossible?
No algorithm is ASIC-proof forever — only ASIC-resistant. XelisHash v2 raises the cost and reduces the efficiency gap so that specialised hardware doesn't crush home miners.
What changed between v1 and v2?
v2 increased memory requirements and re-tuned the hashing chain to close optimisation gaps that early FPGA prototypes exploited.