Is mining on the way out?
I’ve been thinking for a long time that the future of cryptocurrencies is going to be quite different that what we are seeing today. Without a doubt, the way cryptos work and operate is still not easy enough for it to become mainstream. However, I’m able to look back and appreciate objectively how far the technology has progressed within the two years that I’ve been participating of it.
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Mining will probably disappear
Or in the very least it will be extremely rare. Looking at the tendency of the markets, and the people who maintain the networks, it seems obvious to me that we are reaching a crucial point of optimization.
I won’t bore anyone with numbers as it might be not very entertaining, but as much as cryptocurrencies are a fantastic technology, they are still not able to process the required transactions to “take over” our economic system.
This is the case for all cryptos, including Steem, being Steem the one who is at the forefront in speed and capacity. This is one of the reasons why I believe in this project and blockchain so dearly.
Proof of Stake will Rule
This seems very likely, the energy requirements of bloated blockchains are making it close to impossible for miners to stay profitable. Let's be honest, if mining Bitcoin ever becomes unprofitable for miners, then we can rest assured the blockchain will fail.
It’s exactly because of this reason I’m confident that in the future most cryptocurrencies won’t be mined with any algorithm per say, but rather staked.
I’ve been reading about masternodes
They are not a new thing, not by a long shot, but they seem to be a great way to lever one's holdings. Specially, since the current crypto market seems to act as if its testing our emotional fortitude, I think I’m going to explore some of the popular offerings.
And it's because of the reading I’ve been doing in the past few days, that I’m wondering what other Steemians are currently exploring. I’ve seen a few good posts about SmartCash, and a not so great Post on Pivx, being Pivx one that does not interest me too much I should say.
As the old saying goes: “What’s the word on the street these days?”
Hope everyone is having a beautiful friday
That's a reality mentioning that you are talking about you I really like this article
Great article!
That is true!
thank you I was thinking of buying one
Yeah when the operation of mining becomes unprofitable, Bitcoin's automation of increasing and decreasing the difficulty will be like a dog chasing its tale for miners.
If the blockchain fails, what does it really mean?
There would still be endless amounts of opportunity for many other projects to fix what made Bitcoin fail. Blockchain will never fail because blockchain is an idea.
I'm good with staking, it's a lot easier for the average guy, and believe me, I'm very average, lol.
Hmmm. Very interesting post with thought provoking content @chbartist. As a Metallurgical Engineer, who spent 20 years in the mining industry, I would like to comment.
Yes. agreed. And this is exactly what attracted me to this whole asset class to begin with, when researching whether or not to become a "crypto" investor. I was fascinated by the concept of bitcoin being "virtual gold."
So, here is a question. If it was "easy" to find and mine gold, would not then everyone would have a "boatload?" And, therefore, we would find it's value greatly diminished? To the point of near worthlessness?
Would any of us argue the original concept behind the creation of bitcoin was brilliant? To the point the technology spawned from it is still in its "infancy" in transforming the way we live? A critical part of the original concept, to me, was taking steps to ensure there would never be more than a finite amount. And, then just like gold "in the real world," it would become harder and harder to "find" whatever gold had yet to be discovered. Again, absolutely brilliant to come up with a virtual recreation of what we find in nature!!
That said, you bring up an excellent pragmatic, "real world" aspect of carrying this idea to its logical conclusion. The pure cost of mining. So ... Is that truly a problem?
Not sure I can agree with your point / concern here @chbartist. It begs the obvious logical (to me) question. If mining ceased altogether, what would become of the bitcoin already "in existence?" Would it "disappear?"
I make no profession of being a "crypto wizard," but this makes no sense to me. Would not what has already been "mined" still be "around" and supported by the blockchain's ledger? If the answer is "no," then I would sure like to be enlightened on why ...
Again, from my background, it makes perfect sense, depending upon the market for bitcoin (or any other similarly designed crypto), that mining would cease at times when it became unprofitable. And start up again when the price made mining more attractive. To what degree would it be "attractive?" Well, that is the great power of free markets and the individual exercise of our free wills, which I for one passionately support ...
Hope this doesn't come across as critical @chbartist. Not my intention. Just "competing in the marketplace of ideas," along with everyone else in our great, new Steem Community.
Again, I really appreciate the thought provoking content. I have upvoted it and am now following you! 👍 😊
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I appreciate your comment @roleerob I like different perspectives, and trust me I take none of what you said as critical. this is not a one way conversation, because it if it was, it would not be a conversation after all.
I agree with your points, and maybe your thoughts are more balanced than my own.
Thank you for your prompt response @chbartist. And heartened to hear you did not take my comments as critical.
Let's see what other comments may "come in" on your post, as we should all benefit from good intentions in discussions focused on this important issue for us all.
Have a great day (night)! 👍
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It's my understanding that mining is in part, the processing of the transaction so if mining ceased altogether the Bitcoins would still exist but you wouldn't be able to use them until someone started mining again.
IMHO, as long as you can mine on a standard desktop computer you will always have somebody using their office (employers) computer and electricity to mine for "free". I know you can't mine BTC on a standard PC anymore but you can mine XMR and others.
Of course this does nothing for the electrical cost of mining, that is still an issue. I am concerned with the projections that I have seen on the amount of electricity that it will take to mine cryptos in the future. That is something we need to look at. "Save the GPU"
POW may not totally go away but agree POS is better. The potential with POS is huge has even in staking there are different forms. Your mention of smartcash and Pivx each have different ways to stake and earn more of its coin. The potentials are much more than that of POW.
It does seem like Proof of Stake is a lot better. #energyconsumption
That's so true, the last 6 months we're tough to widthstand mentally. The only thing that made me hodl is because of the general goal of cryptocurrencies.
the only thing that made me HODL was I would lose my shirt if I didn't
You gonna sell your shirt? Lmao
thats a stupid reason.
Hopefully! The amount of electricity being consumed by miners is growing to enormous amounts. It will not be scalable forever
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HI NICE POST
unless we aquire the power of the sun!
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which will eventually die out thus rendering my first statement irrelevant :(
wind and hydro-electric are the most viable, solar is good too.