Shitcoin Economy: Part 3 - Environment

-------------------------------------------------------

Here is part 3 of my 5-part series. If you missed part 1 and part 2, you can check out below:

Part 1 - Category: it is about how to categorize cryptocurrency away from other digital currencies

Part 2 - Regulations: it is about why the government wants the regulation but they cannot do so

Part 3 - Environment: it is about how environmental impact on the cryptocurrencies and possible its valuation for the future

Part 4 - Technology: it is about how technology can change the way shitcoin performs and how crypto may evolve to become

Part 5 - Detokenization: it is about speculation that if Bitcoin actually extinct and what may happen

I may change parts depending on my research but here is for you guys to enjoy reading.

-------------------------------------------------------

Here we are again to talk about the environment. The topic becomes more and more significant to future technology because we may face a human existential crisis if our prediction of global warming is true. 

Let’s face it, Proof of Work is a waste of energy. It designed the way to make efforts to mine coins which consume mainly computer power. The longer the chain run, the harder it is to mine the coin.

Proof of Work is purposely designed to have higher program complexity because the blockchain is a distributed system.

One argument of valuation in the coin itself is because the mining process needs energy input and because miners spent efforts to mine the coin, they must be worth something.

When designing the Bitcoin, Satoshi Nakamoto did aware of the fact that the network consumed lots of energy and it might waste lots of energy. His argument back then was that coin utility will outweigh the cost of energy. He could dodge the bullet once but not twice if Bitcoin is the future of the digital currency, there is a need for a solution to resolve its environmental concerns.

Where really does the energy waste come from?

It mainly comes from the competitive nature of the blockchain. Miners are competing to process transactions and gaining block rewards. They are competing for computer power. Unless computers speed outrun others, miners may lose their race.

Bitcoin mining equipment

If using your laptop to run Bitcoin mining, the chance of winning the mining is very low. The computer chip that was purposely designed to win the race is ASICs or Application-Specific Integrated Circuits. It is solely designed to solve the Bitcoin hashing algorithm. 

Technology upgrade to reduce energy consumption

The mining competition is a race of chip upgrade competition. One of the best ASICs in 2017 was called Antminer S9 which has the ability to run 14 terahashes or 14 trillion hashes every second while consuming about 1,400 watts (similar to a microwave oven consumes).

Faster forward to 2021, the fast ASICs can run at 2250 terahashes every second while consuming about 2,200 watts.

The hashing speed increases 161 times and the energy consumption increases only 0.57.

Why is energy consumption the concern?

The competition between miners of profits drives them to seek cheaper energy sources that are more polluted than renewable energy sources.

Therefore, it is not Bitcoin that causes environmental concerns but the energy sources that produce mining power is the question.

How to fix environmental problems?

One way is to reduce mining competition by giving them the power to coin holders. One of the solutions - Proof of Stake may resolve this problem. By spreading the mining proportion of owning amount of coins, users can join the mining to power the network. It also reduces the intensity of the competition between miners and reduces their dependence on cheaper energy sources.

There are all theories

The current solution as Proof of Stake is just a hypothesis that does not have a test in the large and complex infrastructure scale such as the Bitcoin network. We do not really know if it will work to resolve environmental concerns.

Shitcoin environmental concerns

Shitcoin does not reach full scale like Bitcoin so it may never experience the problem like in Bitcoin. But Bitcoin leads a clear path for later crypto to adopt the feasible solution and leapfrog into further future.

In conclusion

If crypto is the future, it needs to give a solution and convince people that it can resolve environmental concerns. 

After all, it is a piece of technology for the future.

Photo by Federico Beccari on Unsplash
Related articles:
Stablecoin is Not So Stable
CBDC: Stablecoin 2.0 or Stablecoin Killer
Chinese CBDC: the Ultimate Financial Weapon or Just another Copycat
DeFi Swap: Great Returns come with Great Cost
CBDC vs Cryptocurrency: the War of Privacy
Inflation vs. Bitcoin: How Speculation to Hedge Inflation has Failed in Short Term but may Create Opportunity in Long Term
Game of Three Kingdoms: CBDC vs. Cryptocurrency vs. TechCoin
Gold vs. Bitcoin: Digital Twin or Enemy
Volatility of Bitcoin: Threat or Opportunity
Lesson Learn from Robinhood IPO: Era of Crypto Exchange Comes to an End or a New Beginning?
Hypothetically, What if the Fed Fails to Control Inflation, Will Crypto Save Us?!
Stablecoin: We Ever Need Them More Than CBDCs
China FUD: Are We Done Yet?
SEC vs. Ripple: the Endless Game of War
SEC vs. Defi: What is the goal of the Defi?
City Coins: Are they the Era of New Coins?
Ethereum London Hardfork: How Hard does It Actually Fork?
Did the U.S. government just thumbs up on Bitcoin and down on Ethereum after the London Hardfork?
The End of Era for Crypto Exchange Platform?!
NFT: Digital Solution or Delusion?
NFT: The Future of Gamers' Assets
Is Bitcoin Untraceable Anymore?! It Depends!
Why Crypto Got So Political Suddenly: The Beginning Tale of Government Crypto Surveillance Program
Where are We Position Crypto at : the Problem with Money and Wealth
Crypto Hacking: How Did it Really Happen?
Bitcoin Mining Recover?! The Chinese vs. The U.S Strategy of Blockchain
The Legendary of Shitcoin: Meme to the ?? or Unique of ?? or Simply just ??
Defi: A Rainbow 5-Layers Cake
Crypto Economy: the Untold Speculative Financial System We will Live?
Red Alert: Lesson Learns from the Nearly Cashless Nation
Jack Dorsey’s Ambitious: Twitter wants to Become a Place of Freedom of Speech
What Categories Does Bitcoin Belong to or Does it Really Matter?
Quantum Financial System: The System Lost Itself in Quantum World
Doge 2.0: Who Let The Dog Out?!
Legendary Hacker: the White Hat into the Rescue
Crypto Hot Hub: The Best Place to become Crypto Incubator
EIP-1559: The Future of Ethereum Economy
Break the Fourth Wall?!
Robot Sucks: How Lousy Jobs AMMs Did to Ruin the DeFi
The Future of Cardano: as Clear or as Uncleared?
We Are Short for the Dollars: The Dollar's Liquidity Issue
Currency Comparison: Bitcoin vs Dollar
Patent the Blockchain: the Nonsense Action Shows a Worry from Big Tech Companies
Forget about Trade War: New Era of the International Trade
Ethereum Got Update Bug: A Blockchain Synchronization Problem
CBDC's Cross Border Payments System: Worse than Crypto
Bitcoin's Energy Concerns, Scalability and the End of Bitcoin Prediction
Unknown Author’s Hypothesis: Creator of PoW and PoS Hybrid Blockchain
Currency Debasement: Cryptocurrency Inflation Hedge Hypothesis Still Hold
Shitcoin Economy: Part 1 - Category
NFT Bubble: Does it Really Matter ?!
Shitcoin Economy: Part 2 - Regulations
Fiat vs. Crypto: Religion vs. Science or Vice Versa

-------------------------------------------------------------------------------------
Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational