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I'm not sure this theory works. If the opex is sufficiently low, even if the capex is higher then miners would migrate to it as the total ROI is greater. They seem to admit this partway through the paper - "a low energy PoW can be achieved by tailoring a PoW algorithm to a hardware paradigm with a CAPEX dominated cost perhash/trial".

But while they've demonstrated a low-energy way of computing an equivalent hash, presumably this is in no way currently competitive. Therefore this proof-of-concept itself is not an example of an algorithm with capex-dominated costs.

Given that capex versus opex is primarily a matter of accounting (i.e. do I buy a PC, or do I rent a VM from AWS?), I don't understand how that algorithmic distinction can even be achieved. If the ongoing cost of running the device become negligible, then you just incentivise the miners to "spend the saving" by buying more mining devices up-front.

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