Lately, I see a lot of jubilant posts about this or that country embracing Bitcoin mining
"Russia Might Start Cryptocurrency Mining Using Its 20+ Gigawatt Surplus"
or that major IT companies are coming out with new products tailored to mining
"AMD Releases Special Driver for Cryptocurrency Mining"
and excited comments by people who apparently, think its a good thing that more and more energy is burned every year to play lottery, as that what mining is, essentially.
Mining is a waste of energy and completely unnecessary.
Using POW (proof of work) algorithm to secure blockchain was revolutionary at the time of Bitcoin creation, but has been obsoleted when various POS (proof of stake) algorithms started to appear.
Consider that second generation blockchains Bitshares and Steem use DPOS (delegated proof of stake) to ensure integrity of the blockchain and do not use mining. They are more decentralized, work much faster and do not need to waste billions on "mining".
Bitcoin is a first generation blockchain, and as such it has great brand name recognition and tens of millions of users, but it's technology is falling behind every year, as blockchain tech industry develops.
I will say it again,
MINING IS OBSOLETE
and the sooner people realize it, the less electricity will be wasted.
Bitcoin is doomed
Mining is built-in in perpetuity into Bitcoin protocol and can not be replaced with a better algorithm unless miners agree. Do you think miners who invested huge amounts of money into mining farms will vote themselves out the job?
Not a chance. Bitcoin is stuck with mining and wasting billions, because miners are the overlords of Bitcoin blockchain. Owners of Bitcoins have no say on the blockchain future, only miners get to decide. This is the fatal flaw that has doomed Bitcoin to fall behind blockchains that are more capable and cheaper to operate.
Why do you think Bitcoin development has been so slow?
Why scaling problem has not been solved?
Because interests of miners come first.
This is interesting and make me think about my mining project. Thanks
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Glad this information is useful for you. I used to have a small mining operation myself a few years back. Got out of it once I realized mining is no longer needed and is indeed a waste.
Bitshares and Steem, among others, are living proof that mining is obsolete.
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This post received a 2% upvote from @randowhale thanks to @slavix! For more information, click here!
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Theres always going to be some alt coin to mine from now on
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Only if it is profitable. Blockchains that utilize mining are at a cost disadvantage with blockchains that don't.
Bitcoin uses new coin creation and transaction fees to pay off miners, while Steem puts most of the new coins created into reward pool, to pay content creators, and charges no transaction fees. Better use of funds don't you think.
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Very good and fair point, I think mining is also a heavy burden for the environment. However if it is doomed I am not sure. We can look at normal gold, the kind of burden and cost for the environment is hard to defend. Whole fields are plown through and hundreds of thousands gallons of gasoline is burned. But still it keeps its place and value in the economy as it is rare and stands the test of time . Perhaps it is the extreme hard labor that goes into mining that also justifies its value ?
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The problem for Bitcoin is that unlike gold Bitcoin can be easily cloned, or replaced with better technology, as is in fact happening already with the likes of Steem.
How can Bitcoin compete long term with blockchains that have a lot more capabilities,
run much faster (3 second transactions on Steem vs 10 minutes on Bitcoin), charge no transaction fees, can scale to millions of tps, vs Bitcoin being stuck in 10-30 tps and charging ever increasing transaction fees?
Mining blockchains are at a huge cost disadvantage vs non-mining blockchains.
Think about this, Bitcoin blockchain is burning money that other blockchains, like Steem, can use to bring value to investors and fund its development.
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Silver is more useful than gold, equally hard to clone, still its value can't be compared to gold. It's because gold was determined to be the King. Value is determined by us people, maybe soon if the general consensus is that some other crypto will be worth more than that might happen, but Bitcoin sure has a first mover advantage, and I don't think people are putting their
Money in Bitcoin because it has the best technology ..
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Yes, Bitcoin does have first mover advantage, but it is fading and as you may have noticed Bitcoin dominance is already gone. Till early this year Bitcoin had 80-90% of the total market cap for crypto-coins, now it is less than half. This trend is irreversible.
Bitcoin will likely be around for a long time, but I expect it to fall behind in market cap and adoption to more capable blockchains within next 1-3 years, 5 years at most. I have a strong suspicion EOS will be the one to take the crown from Bitcoin in the next 2-3 years.
Lets see if I am right.
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If you are right the EOS is a hell of an investment right now ! Actually it is a screaming buy at the moment
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Yep :)
I am stocking up on EOS and telling all who will listen. This thing will go much further than Bitcoin!
Bitcoin is like a coal powered train compared to EOS galactic spaceship.
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I like that metaphor :)
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"Perhaps it is the extreme hard labor that goes into mining that also justifies its value ?" - I think it is a fallacy to correlate cost with value. If someone burns up a bunch of money or does a lot of meaningless and useless work, he may benefit from the exercise, but he has not created value even though his cost was high and he worked a lot. Value comes from utility of the outcome. If nothing of use was produced, regardless of how large was expense or how much work was done, value was not created.
If same or better outcome can be obtained without the expense (mining), spending resources on it is fully wasteful. When there was no alternative to mining, it was justified, but not any longer, as much better and cheaper alternatives exist.
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I agree that is a good point !
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With the extremely low cost of power in China -the King of all Bitcoin mining-the efficiency of mining is still very real(for them). Then you have the growing mainstream acceptance of Bitcoin that no other crypto can even dream about yet. Have crypto and want to use a debit card like Bitpay? It's Bitcoin or nothing for most everyone. Shop on Overstock.com? Bitcoin.
A LOT of Proof-Of-Stake crypto are obviously nothing more than ponzi schemes and have no value except for short-term playing around. When you have a POS crypto that is paying a fixed interest rate , it relies on "new money" totally to pay it, not from any alleged business activities that they proclaim they might be doing. That's the downside of POS. Not having to be a slave to Antminer or rather medicore cloud mining companies is a huge plus for POS and strong argument against mining, even forgetting the energy costs.
When Ethereum goes to POS, it will be interesting. It's still profitable to mine until then and so are a few other crypto's with GPU rigs.
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@slavix got you a $1.65 @minnowbooster upgoat, nice! (Image: pixabay.com)
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Thumbs up!
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What about IOTA that doesn't even need Proof of Stake?
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