China is the largest crypto miner
China is the world’s largest players when it comes to cryptocurrency mining which has been facing increased scrutiny from authorities that may eventually result in regulating the power used for mining. China maintains about 60-75 percent of the bitcoin mining network and, according to Chinese media, 600 bitcoin miners have been seized in the northern municipality of Tianjin, on the grounds of “electricity theft.”
One popular way to measure energy consumption is through the Digiconomist Bitcoin Energy Consumption Index. There is the Ethereum Energy Consumption Index, which offers an identical source for ether. Currently there is no register where global crypto energy consumption is recorded.Many crypto enthusiasts will go as far as running mining operations from their bedrooms, though the cost for both equipment and energy usage has soared. In order to remain profitable, miners will move to locations where the cost of electricity is cheapest.
For example cheap hydroelectric energy has recently made Sweden and Norway places of interest along with Iceland which has been the focus of crypto miners for some time now. According to an EliteFixtures study South Korea is the most expensive country for mining a single Bitcoin, with costs coming in at $26,170 per coin; whereas Venezuela, where the cost per token is just $531, is the cheapestCanadian firm Hydro Quebec hosts 30 large cryptocurrency miners on its network. The vice president of Montreal International, Stephane Paquet, recently called Quebec a place for “green bitcoin.” According to a recent Reuters report, Hydro Quebec offers some of the lowest electricity rates in North America, charges an industrial rate of $0.0248 per kilowatt hour (Kwh) (2.48 US cents) for data centers and $0.0394/kwh (3.94 US cents) for cryptocurrency customers.
As cryptocurrency mining evolves so will the use of energy. The increase in cryptocurrency mining pools on a global scale is rapid. Alexander Blair, VP of Engineering at blockchain cybersecurity and smart contract auditing firm, Hosho, explains crypto mining pools have been a natural response to the issue that arises from solo mining - namely that there is massive financial risk in mining alone due to the fact that mining is essentially a game of chance.
Blair said: “Pooled mining solutions allow groups of people to band together to attempt to find a solution, each receiving a piece of the reward. Due to this, increased centralization is expected, however, the issue is not one that can be solved via a technical means, but instead, would need to be solved by a social contract, held by the developers, miners, and owners of pools.”For those who want to know more about the mining process. So far, there’s been three phases of Bitcoin mining:
CPUs 2009 - 2011: In the beginning any laptop or PC could easily mine bitcoins. The CPU processor provided the computing power.
GPUs. 2011-2013: As bitcoin increased in value, the graphics cards contained within gaming PCs were used. These could solve SHA256 problems much more quickly than CPUs but were more expensive.
ASICs. 2013 onwards: Finally, as bitcoin’s value soared to over $1000 USD in 2013, purpose built mining hardware was created to mine bitcoin. ASIC computers were much more powerful and efficient at mining than GPUs, and are now what keep the Bitcoin network running. They are however, very expensive, and have been criticised because most people cannot afford them. Speaking at Consensus 2018, HTC founder Phil Chen revealed the plan for ‘Exodus’, a smartphone that will support “underlying protocols such as Bitcoin, Lightning Networks, Ethereum, Dfinity, and more.”
The vision revolves around three key selling points: a seamless experience of decentralized apps, inherent security from embedded cold storage, and node functionality. Details were given in a post on Medium:
“The HTC Exodus is the first native blockchain phone dedicated to bringing end consumers the best decentralized application (DApp) experiences, including a built-in secure hardware enclave, and helping underlying protocols expand their base of dedicated nodes, thus expanding the total blockchain ecosystem.”
HTC does have a history of innovation and were the first manufacturer to implement Android, and the first to release 4G-enabled phones in the West. However, despite claiming that this will be the first “native blockchain phone”, they will join a host of other manufacturers aiming to implement the technology. This includes Chinese PC giant Lenovo, Huawei, and leaders in the space, Sirin Labs.
But the exact benefit of these offerings is not clear— are blockchain phones are a worthwhile proposition, or just another variant of blockchain iced tea?Should crypto gain wider adoption, then we could expect transfers over Near-Field Communication (NFC) using smartphones to become more commonplace. The manufacturers claim that phones built with blockchain-specific hardware would make these transfers more secure.
The most developed example comes from Sirin Labs, which held one of the biggest ICOs in recent memory. Security is the key premise of its phone Finney, that claims it will be the only smartphone in the world secure enough to hold cryptocurrency safely.
Phones built with blockchain hardware would also be more secure for all activities rather than just transfers, say Sirin Labs, who argue that as the devices rely on the blockchain and decentralized apps rather than standard technologies, they would make web browsing, messaging, and mail all more private and secure.