Digital Currency Mining Could Change Drastically in the Next Decade

Digital Currency Mining has reached a level where it demands a lot of resources. Recently, a study was published which indicates that digital currencies mines are using more electricity than the country of Iceland. Hence many experts are warning that spending so much electrical energy will become almost unsustainable for many miners and that miners will have to adopt new ideas in order to survive in the market and to continue their business.

With the introduction of new digital currency mines that are located all over the world, the difficulty of mining also becomes bigger. Because of that, the computer power that was required to mine digital currency two or three years ago is not even close to the power that computers need to have in order to mine digital currency these days.

The rise of Bitcoin and Ether popularity has caused appearing of new mines and because of that, miners will be in constant demand for more powerful computer force which might also become unsustainable very soon. These supercomputers are very expensive which means that far from everybody can join the business of mining.

Because of that, digital currency mining is becoming more and more centralized with few companies holding the huge share in the production of digital currencies. As a consequence, in the next ten years, the number of mines might be reduced which will mean that the market has become even more centralized with the huge share of the business being located in the hands of only a few people.

Is there a Need to Switch to Solar Energy?

One of the biggest questions that has appeared recently about this issue is how much energy would digital currency mining require if those digital currencies go mainstream. Because of that, many have wondered would that much energy spending have an effect on climate changes. So more movements from all over the world are calling upon digital currencies mines to switch to renewable sources of energy such as solar energy. In the next ten years, it is expected that solar-powered digital currency mines will be more present in this business.

Some experts are even saying that the hydroelectric power is even better for the digital currency mining because it is much more consistent and besides the water can be used to cool down the equipment required for digital currency mining. Some experts have also claimed that the Proof of Stake or PoS rather than Proof of Work will become a standard in the digital currency market.

Proof of Stake enables decentralization of the network and considering that PoS has been very energy efficient there is no need to use powerful computers to make calculations. Besides that, another advantage of PoS is the fact that it provides much faster validations than it was the case with the Proof of Work. Some digital currency platforms such as Ethereum are already moving towards PoS. The fact is, Proof of Work will always be used in order to verify the blocks on the blockchain but PoS will be a great alternative to PoW in the future.

Written by Ivan Potocki