As the popularity of mining grows, its methods and the amount of energy consumed are under scrutiny. Today we consider five interesting facts about cryptocurrency mining.
China is a crypto miner number XXUMX
China is the largest player in the cryptocurrency mining market. However, miners have recently been faced with increased attention from the authorities, and ultimately this may lead to a reduction in mining capacities. Today, China supports about 60 − 75% bitcoin mining network. But, unfortunately, lately news about the arrests of miners began to appear. So, in April, in the northern municipality of Tianjin, the police confiscated 600 mining computers based on "theft of electricity."
Today there are special indices for calculating energy consumption. The most popular of these is the Digiconomist Bitcoin Energy Consumption Index. There is a similar Ethereum Energy Consumption Index for ether. However, for the time being there is no registry where a record of the global energy consumption of cryptosystems would be kept.
Mining costs continue to rise
Many crypto enthusiasts agree to mine cryptocurrency right in their apartments, despite the fact that the cost of equipment and payment for energy has increased dramatically. Therefore, the majority is thinking about moving to new places with cheap electricity so that business remains profitable.
For example, cheap hydropower has recently made Sweden, Norway and Iceland attractive places not only for tourists, but also for miners. And according to the EliteFixtures study, South Korea is the most expensive country for mining Bitcoins (mining one BTC will cost $ 26 170). And Venezuela, on the contrary, the cost of extracting one BTC will be only $ 531.
As cryptocurrency mining develops, energy consumption will also increase. The number of pools on a global scale is growing incredibly fast. Alexander Blair, vice president of engineering at Hosho for cybersecurity and smart contracts, explains that mining pools are the natural solution to protect against the financial risks that arise during solo mining - because, anyway, this is gambling a game.
Blair said: “Mining pools allow groups of people to come together to find a solution, with each of them receiving a portion of the reward. In connection with this, centralization is increasing, but some technical means are few - developers, miner and pool owners require social contracts. ”
PoW v PoS - the reality of consensus
Regarding consensus algorithms, a Brave New Coin study shows that 30% of crypto assets use the PoW algorithm, 18% - PoS, 8% are PoW-PoS hybrid, and another 4% use new mechanisms, such as Proof of Capacity (proof of resources, PoC) and Proof of Importance (proof of importance, POI). The remaining 40% are issued either as intermediate tokens or in protocol tokens.
Green Revolution in Canadian mining
Canadian firm Hydro Quebec hosts 30 large crypto liners in its network. Montreal International Vice President Stefan Paquet even called Quebec a place for “green Bitcoin.” According to a recent Reuters report, Hydro Quebec offers one of the lowest electricity rates in North America, charging $ 0,0248 per kilowatt-hour (i.e., just 2,48 cents) from data centers and $ 0,0394 per kilowatt-hour (or 3,94 cent) from private cryptocurrency buyers.
Evolution of bitcoin mining chips
This information is useful to those who want to learn more about the process of mining. Today, there are three stages of bitcoin mining:
- CPU 2009 − 2011: Initially, on any laptop or PC, you could easily extract bitcoins. The central processing unit (CPU) fully provided the necessary computing power.
- GPU 2011 − 2013: As the cost of Bitcoin increased, graphics processors (GPUs) from gaming PCs went into action. They could solve issues with the SHA256 certificate much faster than the CPU, but they were more expensive.
- ASIC 2013-present: When in 2013, the cost of bitcoin finally exceeded $ 1000, special mining equipment was created. ASIC computers were much more powerful and more efficient in mining than graphics processors, and now they are supported by the Bitcoin network. However, due to the high prices they are actively criticized - after all, most people cannot afford them.