\n An unfortunate environmental nightmare will soon pass!
\n<\/em><\/span><\/strong>\u2026 Proof-of-Work alternatives are on the horizon\u201d<\/em><\/span><\/strong><\/span><\/p>\n
<\/p>\n
A considerable amount of electricity is used in the process of mining Bitcoin and other cryptocurrencies. Miners are effectively distributed bookkeepers, and this use of resources is part of a system called \u201cproof-of-work<\/i><\/b>\u201d. It keeps the books fair, honest, and without an ability for the miners to collude (In other words, they cannot \u2018cook the books\u2019).<\/p>\n
What makes the process unique and exciting is that this \u201cdistributed consensus\u201d does not require a trusted authority, like a bank. In fact, the whole point of the blockchain revolution is that users trust a mechanism rather than a bank, government or even each other.<\/p>\n
But, for any network that hopes to become part of the financial fabric, it must be ubiquitous and in constant motion. Proof-of-work just doesn\u2019t make the grade, because it doesn\u2019t scale. The need for miners to prove that they did something complex<\/em> sucks up too much power. If Bitcoin or any proof-of-work currency were to be adopted for even a small fraction of commercial and personal transactions<\/em>, it would overwhelm the world\u2019s energy services.<\/p>\n Unfortunately, clean and cheap power makes the problem worse<\/strong>.<\/i> Even if electric capacity were to rise dramatically and experience a great cost reduction, cryptocurrency networks would automatically demand all the extra electricity<\/i>. It is a no-win game, because mining incentives escalate with an increase in supply or drop in cost.<\/p>\n Will large-scale, blockchain-based networks fail, because of enormous electric demand? Fortunately, the future is not so bad, after all<\/strong>. Although networks, like Bitcoin, currently use proof-of-work to ensure honesty and fairness, it is only one of many possible measurement and enforcement mechanisms. Eventually, developers and miners will swap in another proof mechanism<\/strong> to keep the network humming\u2014and without creating an environmental catastrophe.<\/p>\n Will Change in Proof Come in Time?<\/strong><\/p>\n The political process for changing the fairness mechanism (\u201cforking the code\u201d) is complex and fraught with infighting, but the problem will eventually be addressed<\/i>, and it will be solved before electricity becomes a critical issue. Despite a messy voting process, the miners have too much at stake to ignore this problem much longer.<\/p>\n Various proof alternatives are already being used in altcoins. Since Bitcoin is perfectly free to steal these techniques (none can be protected by patent or trade secrecy), we can think of these other coins as beta-tests<\/em> for Bitcoin. How so? As the first and biggest elephant in the room, Bitcoin will likely reign supreme, as long as it doesn\u2019t wait too long before grabbing the best technology and tucking it into its quiver.<\/p>\n Proof-of-Work Alternatives<\/strong><\/p>\n These aren\u2019t the only alternatives to proof-of-work. Ultimately, one or more of these fairness enforcement mechanisms will make its way into Bitcoin and other currencies and blockchain services. In my opinion, the electrical crisis is a genuine threat, but it is one that with a solution that will be implemented soon<\/em>\u2014perhaps even this year.<\/p>\n Related:<\/strong><\/p>\n Philip Raymond<\/a> co-chairs <\/i>CRYPSA<\/i><\/a><\/span>, publishes <\/i>A Wild Duck<\/i><\/a><\/span> and hosts the New York <\/i>Bitcoin Event<\/i><\/a><\/span>. He is keynote speaker at the <\/i>Cryptocurrency Expo<\/i><\/a><\/span> in India this month. <\/i>Click Here<\/i><\/a><\/span> to inquire about a presentation or consulting engagement.<\/i><\/p><\/p>\n","protected":false},"excerpt":{"rendered":" Some blogs and news outlets eschew long titles. Publishers want readers to scan a list of topics that fit on one-line each. But, a better title for this article would be: \u201cMassive electric consumption by cryptocurrency mining: An unfortunate environmental nightmare will soon pass! \u2026 Proof-of-Work alternatives are on the horizon\u201d A considerable amount of [\u2026]<\/p>\n","protected":false},"author":353,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1318,1761,39,1497,1507],"tags":[2949,2161,2121,2950,2630,2951,2952,2617,2953,2628,2954,2618],"class_list":["post-75220","post","type-post","status-publish","format-standard","hentry","category-bitcoin","category-cryptocurrencies","category-economics","category-energy","category-environmental","tag-bft-replication","tag-bitcoin","tag-blockchain","tag-c-v-alkan","tag-distributed-objective-consensus","tag-electrical-deamand","tag-environmental-impact","tag-marko-vukolic","tag-pow-alternative","tag-proof-of-stake","tag-proof-of-work-alternatives","tag-proof-of-work"],"_links":{"self":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/75220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/users\/353"}],"replies":[{"embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/comments?post=75220"}],"version-history":[{"count":6,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/75220\/revisions"}],"predecessor-version":[{"id":75290,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/posts\/75220\/revisions\/75290"}],"wp:attachment":[{"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/media?parent=75220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/categories?post=75220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lifeboat.com\/blog\/wp-json\/wp\/v2\/tags?post=75220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/lifeboat.com\/blog.images\/proof-of-work-alternatives-massive-electric-consumption-by-cryptocurrency-mining2.png\")
One reader suggests the problem will be solved by the recent boom in shale fracking and renewable, non-polluting energy. He points out that crypto mining may even drive a market for distributed, clean electric production.<\/p>\n![\"\"](\"https:\/\/lifeboat.com\/blog.images\/proof-of-work-alternatives-massive-electric-consumption-by-cryptocurrency-mining3.png\")
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