The complete philosophy underlying blockchain is to decentralize data storage, and the know-how itself does that fairly nicely. Nonetheless, there’s one downside on this complete system that we forgot to contemplate — folks. If you consider it, we’re social beings, and we like to affix forces to do issues collectively, even when which means constructing enormous cryptocurrency mining farms.
that is the issue with blockchain at the moment, so we have to discover it additional and see how we are able to repair it.
75% of All Mining Farms Are Positioned in 5 International locations
There are lots of crypto farms across the globe, however the reality stays that almost all of the biggest ones are in nations such because the USA, China, and Russia. These farms aren’t typically owned by only one individual however are a results of a number of folks becoming a member of their entry to computing energy.
Dalian Cryptofarm, for instance, is likely one of the largest mining farms on this planet, and it’s positioned in Dalian, China. It’s even attainable to decide on a mining bundle based on your preferences and make investments small quantities to realize revenue from mining in Dalian. The final time we checked, Dalian’s hash price was 360,000 TH, with a month-to-month power value of greater than $1,170,000. The result’s mining 750 bitcoins a month (which ought to scale back after halving and all the following halvings). Because it seems, this farm mines 3% of all bitcoins, which is a really vital sum of money.
However we’ve already witnessed the Chinese language authorities’s aggressive stance on cryptocurrencies. In different phrases, we don’t know their subsequent transfer, and there’s at all times a tiny probability that the federal government can simply shut down crypto mining farms, together with the one in Dalian. If this occurs, billions of {dollars} in BTC might be misplaced immediately.
Although it’s extra more likely to occur in China, it might additionally occur within the USA or Russia. Massive crypto mining farms are polluters, and governments merely don’t like them. In the event that they resolve that the farms are an excessive amount of of a risk, they won’t shut them down instantly however will discover a method to scale back their operations.
All in all, a decentralized community ought to depend on any single entity, and plainly Bitcoin is shifting in that course, as mining farms are getting greater and the community requires extra computing energy.
What Can We Do About It?
There are a number of options to this. In the intervening time, some cryptocurrencies are switching to a Proof-of-Stake consensus mechanism, which can finish the necessity for top computing energy, which is an efficient factor for the setting. Nonetheless, there are not any indications that Bitcoin will ever change, and it’s nonetheless the biggest and the preferred crypto.
However there are points with Proof of Stake as nicely. Individuals are already creating funding swimming pools the place they will collectively stake their funds within the hope of a much bigger revenue. If such funds develop into too massive, we’ll as soon as once more head in the direction of centralization.
One other method to resolve that is to finish crypto mining farms and return mining to people and small teams. There are already some initiatives for this, comparable to tomi’s MP1 mini supercomputer, which is designed to behave as a micro-server and could be simply linked with different computer systems of the identical type, creating small however efficient crypto mining clusters. Along with crypto, MP1 can supply many various cloud computing providers, together with advanced simulations, accelerated AI, real-time ray tracing, photorealistic rendering, and rather more. The startup is at present engaged on growing the MP1 undertaking.
Last Ideas
No new know-how is dangerous. As we have now seen on many events, the best way we use and apply it may make it dangerous. This additionally applies to the blockchain, which has offered us with a wonderful alternative to make the world extra decentralized, and, thus, extra truthful and reliable.
Nonetheless, we nonetheless must improve it and the whole lot that follows it to attain true decentralization fairly than simply discovering workarounds again to centralization, which is what the massive mining farms in the end are. Even when they observe all of the decentralization guidelines, they nonetheless depend on the stance of highly-centralized organizations we name governments.
The offered content material might embrace the non-public opinion of the creator and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The creator or the publication doesn’t maintain any duty to your private monetary loss.
