Bitcoin miners are about to destruct themselves

Cryptocurrencies are increasing the real physical use of resources
  • Bitcoin miners are in danger if they don’t switch to cheaper technology
  • With soaring prices miners are continuing to get in the game, and the transactions charges are soaring
  • If the miners don’t shift then many countries will begin to put ban on mining processes

Bitcoin miners are receiving several complaints regarding the increasing uses of real physical resources like energy and computer chips. However, such uses can no longer be ignored, if BTC wants to avoid government crackdowns. Indeed, the mining process needs to shift towards the tehchnologies that don’t require constant massive resouce consumption to maintain the digital assets price. On the other side, many enthusiasts in the cryptosphere believe that virtual currency is going to undermine central banks and take over from fiat currencies like the USD.

Bitcoin miners are continuing to draw in the game

The price of BTC is soaring tremendously since a few months and is continuing to surge higher. With high prices each winning becomes more valuable. Indeed, the bigger rewards are getting more Bitcoin miners into the game. Such miners are spending more resources like computers, chips, and electricity to guess. As no evil players can come in and change all the transactions, the miners are getting all the BTCs which requires more spending on resources. Simultaneously the miners are spending to keep the network reliable.

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Following the aforementioned facts, more uptrend in prices will lead to more usage of resources. Indeed, back in 2017, when BTC was trading at the price level of $1k Digiconomists estimated that the mining operations used around 10 TWh/yr. Currently as the price has gone up by a factor of 50, the energy consumption has also surged a factor of 8 or 9.

Why are Bitcoins transaction charges soaring?

The spiraling resource consumption for Bitcoin mining is a sign of a basic weakness in the technology supporting the cryptocurrency. Many traditional financial assets like gold’s storing cost don’t soar with the price. Moreover transactions of most of the currencies are super cheap, as centralized authorities are more trusted. Means the decentralized trust of the leading cryptocurrency is the reason behind the soaring transaction costs.

Following the scenario, it seems like more countries will be putting a ban on Bitcoin mining soon. Moreover, countries manufacturing chips for mining operations are expected to ban chips being sold to miners. Eventually this will be bad for miners, as well as investors and developers.

However, to avert this outcome the developers controlling BTC algorithms should switch towards cheaper technology. One example of such technology is the Proof-of-Stake systemwhere the mining process will be done by individuals holding cryptos in bulk. Indeed, such factors will massively save resources.

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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