...){kind=link}
Crypto Mining Won’t Survive Another Round of Environmental Legislation – It was only a matter of time until China outlawed Bitcoin (BTC) mining, trading, and other crypto-related activities. A special exemption is required to do anything with Bitcoin anywhere in the People’s Republic.
The stated goal of the Chinese government’s Bitcoin crackdown is to lessen Bitcoin’s well-documented climate impact.
China’s righteous rage at energy-guzzling, carbon-emitting mined cryptocurrencies in the name of the planet’s climate is just the first salvo in an impending global showdown over Bitcoin and other crypto projects that rely on proof-of-work (PoW), the complex crypto security mechanism we call “mining.” This does not appear to be a struggle that cryptocurrency can or will win.
This is a difficult fact to accept for plenty of cryptocurrency enthusiasts who own Bitcoin. Fortunately, there is a useful analogy, and it even goes by the same name: coal mining.
Because there are cleaner, cheaper, more efficient, and technologically advanced alternatives to coal, it is on its way out.
Coal isn’t going down without a fight, thanks to well-heeled industry lobbies and influential politicians who are often swayed by campaign contributions.
Even yet, you’d hunt for a new financial adviser if yours told you he had a good feeling about investing in coal. For similar reasons, it may be time to recognize that mining, from coal to cryptocurrency, will likely become obsolete in the near future.
Also Read: Why The Crypto Market Is Down
Crypto Mining Won’t Survive Another Round of Environmental Legislation – Short-term Effects of China’s Bitcoin Ban
The full impact of China’s war on Bitcoin has been momentarily buffered by a combination of inertia and reluctance to stop mining.
Following the initial shock, the United States seized the opportunity offered by China’s restriction to establish itself as the world’s new mining hub.
According to recent statistics, Kazakhstan and Malaysia are expanding their mining operations, as well as Germany and Ireland in Europe, and Iran in the Middle East.
The battle to keep crypto-mining afloat has resulted in some unusual geopolitical bedfellows.
Some investors may find comfort in such a colorful and diverse “Bitcoin mining coalition,” but it will not survive the test of time.
The United States can’t compete with China’s low energy prices, and it can’t keep its mining crown for long. Germany and Ireland are in the same situation.
Malaysia is also vulnerable to extreme weather and increasing sea levels, which would make it impossible for it to continue mining cryptocurrency in the medium to long future. Taken together, these developments drastically limit the future prospects of mined cryptocurrency.
Also Read: El Salvador Plans To Offer Crypto-Based Loans For SMEs
Abolishing Mining can Jumpstart the Crypto Economy of the Future
We can achieve a lot more for the nascent digital economy if we put the resources set aside for Bitcoin mining into more advanced and environmentally friendly crypto initiatives.
We may either maintain loading coal into the existing steam locomotive or upgrade to a bullet train and invest the resources to make it move longer and quicker. Some may point to renewables and how Bitcoin can use more green energy to lessen its carbon impact.
Renewable energy currently accounts for less than one-third of global electric power. If all of this money went into cryptocurrency mining, it might give it a semblance of long-term viability.
We’d be much better off channeling renewable energy into truly sustainable and logical applications. In terms of cryptography, there are several interesting and theoretically sound methods that have the ability to provide a network with PoW-level security.
Mining is on its way out, and by delaying its extinction, we are putting ourselves at risk. Switching to lighter, more sustainable, and scalable solutions will make the crypto sector more accessible to a broader audience while also delivering on the promise of real decentralization and democratization.
The sooner we recognize this reality and make the necessary changes, the better for everyone involved in and outside of the cryptosphere.