Power Of Mining
It is very well documented about how much power is now required for Bitcoin mining. Every few months a new country is named as the comparison for how much power is needed to mine the Cryptocurrency every single day.
Although the industry is trying to compensate by using a lot more greener sources of power, these alternatives cannot be built and made operational quick enough to keep up with the alarming rate at which Bitcoin mining is growing.
Facts and figures on the energy consumption are being kept up to date on The Digiconomist’s Bitcoin Energy Consumption Index Chart and it is very clear where the trend is going.
In an attempt to try and reduce the amount of power being used, the industry is now looking at possibly moving away from the more traditional Proof of Work system which is using up all of the power. Considerations are now being reviewed:
Proof Of Work
This system is absolutely draining the power out of the world’s energy grids because of the way it is set up. Simply put, a vast amount of machines, all needing a lot of energy, are required to keep up with the transactions taking place on Bitcoin’s Blockchain. And in order to make sure that every detail is captured and the system is updated, every single second, many hashes are produced. This in itself takes up an awful lot of power because the mining machines are constantly working and forever revising and streamlining.
However, unlike Proof Of Stake, Proof of Work is proven, tried and tested even though it does test the power grids beyond belief. The system is not as effective as it could be and will find it hard to keep up with Bitcoin mining if the industry continues to grow as it currently is.
Proof Of Stake
This option is nowhere near as stable as Proof of Work and there are concerns about other features, which are definitely a disadvantage to this particular option. However, on the plus side, Proof Of Stake is a lot more efficient and more secure on a network. It also needs nowhere near the power of Proof of Work. This is something – as highlighted above – which is a major sticking point at the moment in Bitcoin mining.
The Proof of Stake system relies on validations of transactions and rewarding the owners of tokens with transaction fees. This whole process occurs a lot faster than Proof of Work. Also with this choice, as a user, you are able to retain your tokens for a lot longer than you would on Proof of Work.
As is standard with anything Cryptocurrency related there are two very different schools of thought that stand miles apart from each other. As the Bitcoin industry grows and the energy consumption increases, pressure will continue to build on finding an alternative to reduce the amount of energy needed. Environmentally and politically this is a huge challenge.
Another one of those situations where only time will tell what the future holds.