In recent years, cryptocurrency mining and data centers have flocked to Canada to benefit from plentiful, low-cost sources of hydroelectric power. The cooler climate also works to an advantage because the heat generated from cryptocurrency mining has a lower impact and uses less power as a result. Conditions are now changing and changing fast. Canada is implementing plans for regulation of crypto mining via access to hydroelectric power.
Bitcoin, and cryptocurrency mining in general, has been experiencing bad news lately on many different fronts. Going through the present downturn, the value has decreased considerably and regulation looms ahead to make things even more difficult. Bitcoin is at the core of cryptocurrency and at the core of this entire community.
All roads lead back to Bitcoin, making it even more important that the power consumption and electricity over-usage be addressed quickly and effectively. The concern is real, and its widespread effects are causing uneasiness among all miners, users and possibly impeding the future of cryptocurrency.
Saving cryptocurrency now requires a complete re-evaluation and re-assessment of the infrastructure basics. The existing equipment required for "Proof of Work" mining overuses power and resources. The power required to run the mining equipment is contingent upon accessing affordable electricity. This is where "Proof of Stake" mining really shines and is an obvious solution because it only requires a small fraction of the power used by "Proof of Work" mining.
With the Proof of Work machines, miners must continually run faster and faster equipment to solve the equations that produce the coins. The economics are being shifted in favor of larger and larger mining operations, the only ones capable of affording the electricity to run the machines.
What started out as a decentralized system ideal is quickly collapsing into a centralized system by way of fierce competition for resources. Bitcoin has acted as the "canary in the coal mine" of sorts, feeling the full effects of the compacting and consolidating of this initially widely distributed network into giant merged mammoths.
The original vision of cryptocurrency was a decentralization system that allowed small, individual miners with just a regular laptop to be a part of the network. Proof of Work mining has rapidly digressed into a competitive and tenacious contest against other miners to generate the next Bitcoin, unlike Proof of Stake mining which is a collaborative effort.
A faster and faster computer is now necessary. The algorithm is written so it gets more and more difficult to solve, prompting a trend toward a computing speed level that will eventually belong to only those with supercomputers and quantum computers. Who owns supercomputers and quantum computers except mega corporations?
This further leads to a complete and definite breakdown in competition and collaboration when seen from the long view. It has instead produced a continuous movement toward a more and more centralized system, essentially defeating the purpose of its inception.
It’s back to power (electricity, control, influence) once again and a system initially set up to decentralize, distribute and encourage participation and partnership among many is morphing into a mega system controlled by a few.
Although this may sound like a lot of bad news for cryptocurrency, and it is very bad news for Proof of Work mining, it is actually very good news for Proof of Stake mining. Hopefully, this will be alarm bells for the crypto community to take a second look. We don't want Bitcoin to hit a brick wall or crash and die because a lot is dependent upon it. The answer is to make a systematic transition out of "Proof of Work" to "Proof of Stake". This will re-route cryptocurrency back onto it's original path of decentralization. Let's support emergent coins and technologies like Bitcoin Green and let's move this forward!