Can Wij Prevent a Global Energy Laagconjunctuur From Bitcoin Mining, Greentech Media

Some ideas on how to zekering bitcoin mining from ruining the planet.

Unchecked bitcoin mining could equal the world’s current tens unit consumption.

Bitcoin has a large and rapidly growing energy and environmental footprint. The bitcoin ecosystem now uses approximately the same power spil the entire country of Bulgaria, about 0.Two procent of the global total for electrical play.

Bitcoin&rsquo,s computing network has grown at an 1,100 procent average annual tempo overheen the last five years. So if wij project out just a few years, wij get a truly massive energy request for the fresh king of coins: Bitcoin would use more violet wand than the entire world uses today, by 2020, if the latest growth trend ter bitcoin mining power resumes.

Spil of December 2018, the global hashrate is about 17 exahash vanaf 2nd (EH/s), up from just Two.Five at the beginning of the year, and up from just about Ten,000 terahash vanaf 2nd (TH/s) at the beginning of 2014. (The hashrate is the processing speed of the bitcoin network.)

What will toebijten if and when bitcoin starts consuming a significant portion of global power? The massive profits available to miners provide a strong incentive to proceed mining even with dirty power, consequences be damned.

I&rsquo,ve suggested here that solar -powered bitcoin mining is part of the solution, because solar power&rsquo,s environmental footprint is relatively benign compared to its competitors. But even solar has a footprint — a rather large one te terms of the land it uses. It has no emissions and almost no visual footprint, but the habitat it potentially displaces, or the agricultural activities it may displace, are significant environmental factors to consider.

Here&rsquo,s the crux of the problem: There is no upper limit to the price of bitcoin and therefore no upper limit to how much energy and resources could be appropriated to mine bitcoin — even if wij proceed to see substantial improvements te the efficiency of fresh mining machines.

The fact that only 21 million bitcoin can be mined doesn&rsquo,t limit either the price or the mining power, since the bitcoin algorithm adjusts difficulty upward, with no upper limit, ter order to keep mining one block every Ten minutes. If more and more people pile into bitcoin te the coming years, the price will keep going up with no limit, and, equivalently, the mining power will keep going up with no limit.

Even if all bitcoin mining wasgoed done with solar power, with no upper limit to the amount of mining that could take place, it wouldn&rsquo,t be long at current growth rates before literally all available land would be used for solar power and mining.

It is very unlikely that wij will reach a point where even a substantial fraction of our available land will be loyal to solar bitcoin mining, but knowing where current trends could lead is significant te assessing the scope of the problem and the potential solutions.

Wij will likely see governments step ter and regulate (or even verbod) bitcoin mining long before it becomes such a serious energy or land problem. However, with such large potential profits from bitcoin mining, presently and for many decades to come, there will be a very strong incentive for developers to proceed to expand mining operations. Mining will be profitable through at least 2140. The bitcoin algorithm requires that it will take until that time to mine all 21 million bitcoins, released ter one block every Ten minutes until 2140, with the amount of coins presently at 12.Five vanaf block but declining by half every four years.

(Some readers may think that the quadrennial halving of bitcoin block prizes will make mining unprofitable long before 2140, but this is very unlikely. Wij have seen the opposite trend ter the last duo of years. The price/difficulty ratio, a measure I&rsquo,ve created, succesnummer its highest point ter late 2018 — overheen five times its lowest point te early 2018 — spil the price has far outpaced difficulty increases and halvings.)

Proof of work is how bitcoin dispenses with trusted third parties

There are alternatives to the bitcoin mining system, however, that may not require heavy-handed government activity to intervene. Let&rsquo,s very first look at how bitcoin presently works.

Fresh coins are mined through a system known spil proof of work. The &ldquo,work&rdquo, te this case is performed by computers to find hash keys that represent the next block of coins. Hash keys are very long cryptographic codes that get more and more difficult spil more and more people mine bitcoin.

The hash key discovery process is why bitcoin is called a &ldquo,cryptocurrency,&rdquo, and why it can operate spil a purely peer-to-peer currency with no regulators and no trusted third parties. The hash keys go into the blockchain, an electronic distributed ledger, and cannot be faked or duplicated without spil much or more computing power that wasgoed required to create the very first hash key.

Each transaction on the bitcoin blockchain voorwaarde be confirmed by a number of other parties before it is considered valid. This redundancy is required te order to avoid fraud or conflicting transactions. It would require 51 procent of the vast bitcoin computing network to fake transactions — this is known spil a 51 procent attack. Such an attack could undermine bitcoin, but no party or group of parties has yet achieved 51 procent mining power. (See The Book of Satoshi for thoughts from Satoshi Nakamoto, the creator of bitcoin, on the potential for 51 procent attacks.)

The end result is a very secure system that has worked almost flawlessly for about nine years. While there have bot many high-profile cases of hacking various bitcoin exchanges, bitcoin itself has almost never bot hacked. (There is a rather glaring exception to this history, which recently came to light, and may eventually lead to serious problems down the road for bitcoin.)

But back to proof of work and why it wasgoed adopted by bitcoin. Proof of work substitutes computers and mathematics for central banks and aggressive militaries te order to build a functional global currency. I won&rsquo,t debate here whether this switch is wise. Instead, I&rsquo,m going to examine whether a shift to proof of stake, the key alternative to proof of work, is warranted given the looming energy and environmental problems facing bitcoin, spil well spil whether or not it&rsquo,s likely to toebijten.

Proof of stake spil an alternative to proof of work

Proof of stake offers a different way of ensuring the validity of each block and transaction. Investopedia provides a succinct discussion: “The proof of stake (POS) seeks to address [the energy use] punt by attributing mining power to the proportion of coins held by a miner. This way, instead of utilizing energy to reaction POW puzzles, a POS miner is limited to mining a percentage of transactions that is reflective of his or hier ownership stake. For example, a miner who possesses 3% of the bitcoin available can theoretically mine only 3% of the blocks.”

This switch eliminates the incentive to amass more and more mining power. The computing power required for POS systems is evidently a puny fraction of the comparable POW systems.

A more detailed discussion can be found at the Bitcoin Wiki webstek here, including discussion of a hybrid POW and POS system, combining the best features of both.

How do wij persuade very wealthy bitcoin mining owners to agree to a shift to POS, which may lock te their mining power at a static level indefinitely? Latest attempts to improve the bitcoin software to permit for larger block sizes, which has bot very difficult ter terms of achieving any zuigeling of overeenstemming, doesn&rsquo,t postbode well for achieving such a significant switch te how fresh blocks are discovered.

All the incentives ter the bitcoin system seem to be pushing hard to keep proof of work te place. This is a classic &ldquo,tragedy of the commons&rdquo, problem that is the root of many environmental issues. Each individual is incentivized to use spil much of the commons (te this case the global environment) spil it can ter order to profit individually, but spil everyone pursues their individual good, the commons itself is quickly ruined.

Could a hard fork be implemented to switch bitcoin to proof of stake?

There may be ways to get around thesis unintended consequences of bitcoin. There have already bot a number of hard forks (i.e., protocol upgrades) to bitcoin, including Bitcoin Metselspecie, Bitcoin Gold, Bitcoin Silver, Bitcoin Diamond and others. Some of thesis are doing fairly well, particularly Bitcoin Metselspecie, which has succesnummer 50 procent of the price of bitcoin.

Could a hard fork to bitcoin POS be done? Anyone can do a hard fork of the open-source bitcoin software. The question isn’t whether it can be done, rather, it’s whether it will be adopted. Wij can&rsquo,t know the reaction until someone implements the fork and puts it out there for the community to consider.

Lightning Bitcoin is an already-announced hard fork of bitcoin that would use a type of POS and have a very rapid 3-second block time. Lightning Bitcoin&rsquo,s hard fork took place on December 23, so wij may see very shortly how a bitcoin POS coin will fare ter the increasingly crowded crypto marketplace.

A big shift toward an existing crypto like Peercoin, which already uses a hybrid POS system, could be another option. Peercoin uses the same hashing algorithm spil bitcoin (SHA-256), so all existing bitcoin miners could ter theory switch to mining Peercoin, which is required to create Peercoin coins, based on their allotted stake, resulting ter a far less energy-intensive future. Peercoin is now ter the top 100 of cryptocurrencies ter terms of market capitalization. (The Peercoin white paper is here.)

PIVX (formerly known spil DarkNet) is another POS hybrid crypto that also includes enhanced privacy options. PIVX is based on Bitcoin Core and is a fork of Dash, so it is already a type of bitcoin hard fork that uses POS. (The PIVX white paper is here.) It&rsquo,s presently the 46th most valuable coin and climbing.

The last altcoin I&rsquo,ll mention is Ethereum (with coins known spil ether). Ethereum is switching to POS te the next year or two, ter a slow, phased-in process (the date hasn&rsquo,t bot announced yet), an undertaking which has sparked much discussion. Ethereum is not meant to be a widely used cryptocurrency, rather, it wasgoed designed to be a clever contracts toneelpodium and a type of fully distributed &ldquo,world laptop.&rdquo, But Ethereum’s adaptability could permit it to become an alternative to bitcoin spil a digital currency.

Ethereum is well established spil the 2nd most valuable cryptocurrency today, with a $96 billion market cap compared to bitcoin&rsquo,s approximate $264 billion (spil of this writing). It is not unrealistic to imagine that Ethereum may one day dethrone bitcoin — particularly if POS becomes the preferred solution for avoiding the looming environmental catastrophe posed by bitcoin under POW.

Summing up

It seems likely that most or all bitcoin mining will need to use renewable energy like solar, wind, biomass, geothermal or hydropower ter order to minimize its environmental footprint. Some governments may step te and require this shift te order for entities to be permitted to proceed mining. Under this script, mining with renewable energy may be a way to &ldquo,future-proof&rdquo, one&rsquo,s mining operations.

Wij may also see a strong shove for a shift to proof of stake instead of proof of work, either te fresh forks or updates to Bitcoin Core, or with the creation of entirely fresh cryptocurrencies. Wij’ll have to see thesis POS alternatives te the marketplace to find out if they’re going to catch on.

If there is a significant shift of SHA-256 mining power away from bitcoin because of POS or other factors, the massive global mining power already built up will have to shift mining operations, at least te part, to other coins, if those alternatives are profitable. Ter that event, environmental concerns will likely proceed.

Epilogue: Is bitcoin a type of world-eating artificial intelligence?

Reporter Eric Holthaus recently hinted that wij may be witnessing the type of runaway artificial intelligence that philosopher Nick Bostrom worried about te his book Superintelligence: Paths, Dangers, Strategies.

Bostrom worries that machines with rudimentary AI — but with a very effective and focused production mission — may escape the control of their creators and end up ruining us. Bostrom uses the example of an automated paper-clip maker that is so good, it finishes up using all the world&rsquo,s resources to make ever-growing mountains of paper clips, literally drowning humans ter paper clips.

This example is fanciful, but meant to illustrate the danger of ordinary AIs that are enormously good at their defined tasks. Wij may not need to imagine an AI that is far more slim than humans te order to be worried about the potential for harm.

The rapidly growing bitcoin mining network isn&rsquo,t itself slim te any traditional sense. But given the very powerful financial incentives inducing humans to grow the network and exponentially consume more and more power, it is a clear example of what Bostrom worries about: rudimentary intelligence leading to very perverse large-scale outcomes.

Will bitcoin end up controlling its creators and eventually consuming more and more resources on our puny planet?

Again, such a screenplay is fanciful. But wij should commence thinking about how to prevent this remote-but-dangerous future from playing out.

Tam Hunt is a lawyer and possessor of Community Renewable Solutions LLC, a renewable energy project development and policy advocacy hard based te Santa Barbara, California and Hilo, Hawaii, co-founder of Solar Trains LLC, and author of the fresh book, Solar: Why Our Energy Future Is So Bright.

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