I believe, originally, POW was not only designed for secure the network, but it was also designed to increase network effect.

Why? Miners don’t receive all the coins he need at one time, instead, they receive little by little, that keep them still in the network. They learn about coin, and talk about it with many people, sell some coins, give away some coins. etc. Those are interactions between members of the network.


Over time, coin emission reduce makes more people rushing into the network, and they interact with each other and it the network effect makes value of the network increase, and number of coins increase slowly and it makes price of coin increase.

However, ASIC appeared. ASIC makes mining become centralized. Instead of distributing coin to more people, ASIC makes only fewer people receive coin. This can be considered as Reverse Network Effect (see the article Reverse Network Effects: Why Today’s Social Networks Can Fail As They Grow Larger). This effect reduces value of the network, and it makes coin price’s reduced. We can see ASIC mining is somewhat similar to spam in a social network. Spam makes information less relevant to the users of a social network, and ASIC makes mining less interesting, less profit for large part of miners, and discourage them continue to stay in the network.

To utilize network effect created by mining, I think we should change mining algorithm so that it could prevent ASIC. Luckily, with the two tiers network like Dash, we can have many options to create anti-ASIC mining algorithm.

In addition, I think using both new mining algorithm with Deterministic Holder List could be very interesting.