It’s time to consider cryptocurrency mining as emblematic of the past. Although mining will likely stay around for a long time, at some point the need for a complex network of energy-hungry processing units will eventually diminish. Perhaps rendered obsolete less by new technology than by the agencies or companies that control the price of energy.
Manipulation of the network and a vessel for control exists through energy providers. While the cornerstone of almost all currencies fueled by mining is decentralization, the overbearing demands of mining may very well destroy the foundation of those currencies. In particular, its overwhelming energy consumption.
One of the most groundbreaking technological achievements in the cryptocurrency field is XTRABYTES’ Proof-Of-Signature (POS) technology. When compared to the giants like Bitcoin and Litecoin, it’s baffling to think that the dark cloud looming over most mega coins is the notion that they are being shackled to a Proof-Of-Work protocol.
Energy consumption is the biggest underlying issue with the Proof-Of-Work protocol, an issue that may yet undermine the protocol’s integrity. The POW protocol is the foundation for early pioneer coins, serving as the key to decentralization and trust in the cryptocurrency field. Now it’s starting to become a thorn to cryptocurrency and a major reason emerging coins are surfacing with new consensus technology.
The increasing demand for energy and hardware is perpetual when considering how the network functions. The PoW protocol relies on a network of miners, or computers dedicated to solving complicated math problems to verify transactions over the BTC network. As the demand for BTC increases, transactions and the need for more miners increases, all equating to more energy consumption.
According to the International Energy Agency, if Bitcoin were a country it would be ranked somewhere in between Lithuania and Libya relative to its energy consumption. The vast and ever-growing energy needs of the BTC network testify to how unsustainable mining is as well as its burden on the economy.
At present, computers mining cryptocurrency account for 0.16 percent of the world’s electricity consumption. In The Verge, Eric Holthaus has calculated that by July 2019, bitcoin mining will require more electricity than the United States can provide. And by early 2020, mining will consume as much electricity as that consumed by the entire world.
Although one could argue that such developments will propel renewable energy use, critics note that neither energy consumption nor energy sourcing is the issue so much as low energy prices are determined. Perhaps one of the most overlooked and neglected aspects of cryptocurrency, few ponder how prices might act if the energy industry starts to act as a monopoly.
What good is cryptocurrency if its stability and longevity are dependent upon skyrocketing prices? While seemingly as outlandish scenario, the likelihood that this may come to pass still exists. And one that new technologies like XTRABYTES’ Proof-Of-Signature seek to change. The PoSign protocol works by using a network of offline and online nodes to produce and double-check signature verified transactions. This consensus method may serve to solve many of the energy problems the cryptocurrency field is currently facing. It also allows the crypto field to move a step closer toward a true decentralized currency and a big leap away from a monetary system.