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Evolution of Crypto Mining

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The financial markets across the globe are going through a bearish phase and the cryptocurrency markets aren’t a stranger to this phenomena. The entire industry has been reeling through a crisis with investors losing a tremendous amount of value since the last few months. However, apart from the investors, the “Crypto Mining” industry is also undergoing a crisis. The entire mining industry has cooled down and the profit margins have significantly dried out. Miners are surviving with bare minimum profits which has resulted in a serious misconception in the industry that the mining industry is officially dead. However this conception is pretty much wrong because instead of dying the mining industry has evolved itself completely.

Prior to the pandemic the miners had started considering the adverse effects of mining on nature. It had become evident up to a point that it wasn’t feasible to ignore the ill effects of mining entirely. Bitcoin already used to consume a lot of energy and with the inclusion of a higher number of miners in the industry the energy consumption was increasing drastically thus turning the energy consumption into a significant issue.

The primary reason behind the high energy consumption is because the current proof of work system consumes a tremendous amount of energy because in order to run the proof of work system a miner has to solve various complex mathematical problems on devices which consume a high amount of energy. Contrary to the projection that the energy consumption is as severe as catastrophic the energy consumption is not negligible but it still isn’t catastrophic. In order to solve this problem miners are looking forward to various innovative solutions.

  • PROOF OF STAKE SYSTEM – Various cryptocurrencies have started opting for a proof of stake system which consumes a low amount of energy as compared to the proof of work system. Ethereum is spearheading this change of consensus mechanism by adopting the new consensus mechanism on its entire blockchain. Apart from low energy consumption the new consensus mechanism affects the entire functionality of the blockchain networks.
  • DIVERSIFICATION – Various miners across the cryptocurrency ecosystem have started mining various other coins apart from the mainstream ones. Miners are multi purposing their entire servers and trying to mine coins which are comparatively economical and possess less competition.

Apart from this there is a significant market force trying to solve the problems of the entire industry with the help of bringing in innovation in the cryptocurrency mining industry. Therefore, contrary to the popular belief that mining is dead, the market is significantly innovating and finding various solutions to solve the problems of the cryptocurrency markets.