The enormous use of energy needed to mine bitcoin and other cryptocurrencies is proving to be very contentious, but alternative methods pose far too much of a security risk.
The latest warning that tens unit use at bitcoin mining facilities te Iceland may exceed that consumed annually by the country&rsquo,s homes, which could te turn lead to a potential energy shortage, wasgoed slightly alarmist te tone. But it showcases the thick amount of computational power needed to mine cryptocurrencies.
Is the current cryptocurrency mining process indeed spil wasteful and &ldquo,futile&rdquo, spil critics say, and is it ter need of a more efficient and cleaner system?
The current mining process is indeed resource-intensive and wasteful, but there is no magic fix te glance. Many would argue that it&rsquo,s precisely the &ldquo,futile&rdquo, nature of cryptocurrency mining that keeps the system secure.
Bam! PoW! Zap!
Cryptocurrencies are based on a globally distributed ledger collective among all participants ter a decentralized network. This ledger is generally organiZed te the form of a cumbersome gegevens structure&mdash,the blockchain&mdash,which consists of blocks of transactions that are cryptographically linked to each other. Most cryptocurrencies use a particular mechanism, dubbed proof-of-work (PoW), to determine which participant gets the right to add a fresh block of transactions to the blockchain.
To prevent dishonest participants from creating numerous identities to manipulate the public vote, PoW requires participants&mdash,called miners&mdash,to use special software to solve an utterly difficult cryptographic puzzle. Te ordinary terms, solving the puzzle involves guessing a random number inbetween zero and an infinitely large number.
It requests a lotsbestemming of computational power because, spil more machines are used, a miner can quickly attempt different combinations and increase the odds of solving the puzzle. But cryptocurrency mining comes at a cost ter the form of custom-made hardware and electro-therapy consumption.
Bitcoin miners alone produce ems of quintillion guesses&mdash,known under cryptographic terminology spil &ldquo,hashes&rdquo,&mdash,vanaf 2nd. This gargantuan number has risen ter tandem with the amount of energy that has bot consumed. The main point of contention is that performing thesis computations doesn&rsquo,t serve any useful or productive purpose outside of cryptocurrency mining itself.
But attempts to address the seemingly wasted computing power generated by bitcoin mining have largely fallen plane.
Projects overheen the past few years include Primecoin, a cryptocurrency launched ter 2013 that incentivizes miners to find a particular sequence of prime numbers. The same year, Gridcoin wasgoed launched to prize people for contributing to scientific research projects by requiring miners to perform scientific computations on BOINC, the Berkeley open infrastructure for network computing.
SolarCoin wasgoed established te early 2014 to incentivize the generation of solar electrical play, and the following year students created MangoCoinz spil part of a laptop science project that aims to prize miners for performing actual physical work.
But, after initial excitement, all thesis projects had limited success and are only marginally used today.
More recently, the concept of &ldquo,virtual mining&rdquo, has also emerged to address the high energy consumption of cryptocurrency mining by removing the need for performing computations altogether. This works by tying a miner&rsquo,s vote proportionally to their cryptocurrency holdings&mdash,an treatment that became known spil proof-of-stake (PoS).
But it&rsquo,s unclear, according to previous research, whether unspoiled PoS systems can achieve the same high security standards spil PoW and there have bot incidents to accentuate such doubts. Te 2014, it wasgoed reported that stolen cryptocoins could be used to attack PoS-based networks. A hack at an exchange controlling 30% of the monetary supply of the cryptocurrency VeriCoin, prompted the project&rsquo,s developers to implement an emergency measure&mdash,rewriting parts of the transaction history&mdash,to prevent the hacker from using the stolen coins to attack the blockchain network.
So&mdash,for now&mdash,PoW remains the best available mechanism to maintain and secure decentralized cryptocurrency systems. Many believe that mining, while energy-sapping, should remain resource-intensive to make it prohibitively expensive for any single entity to build up sustained control overheen the decentralized system.
Given how quickly computing technology develops, perhaps an alternative method will be found. Until then, wij emerge stuck&mdash,for better or worse&mdash,with a drain on computational systems and energy resources to power bitcoin and other cryptocurrency networks securely.