How Does the Constant Arms Race between ASIC Manufacturers and Algorithm Developers Affect Network Stability?

The arms race creates instability because developers frequently have to change the hashing algorithm (a hard fork) to maintain ASIC resistance. Each change invalidates existing ASICs, causing market disruption and potential chain splits.

If the developers fail to adapt, a new, powerful ASIC could quickly centralize the network's hash rate, also leading to instability and security concerns.