Cryptocurrency miningIt is not possible to say that the general opinions on the subject are very good. According to many people, cryptocurrency mining is a very difficult and environmentally damaging process that requires large capitals. However, this perception is slowly changing because the emergence of different alternatives in mining, large miners starting to use more sustainable energy and the increase in alternatives on the hardware side have a very positive effect.
Restrictions May Come
We have seen recently that the European Union is not afraid to show its strength in the technology market. The PoW (proof-of-work) consensus mining used by Bitcoin and other older generation coins does not seem to escape this power. Earlier this year, we shared a lot of news regarding PoW bans coming from the EU. The proposed framework for this ban was more recently rejected in parliament. However, some regions, particularly China, have banned Bitcoin mining in the past. Stricter regulations are always a possibility, especially where mining consumes a lot of energy.
Sustainable Options are at the Forefront
Behind all cryptocurrencies, PoW is not trusted. On the other hand, the value of a crypto-asset is not just dependent on the mechanism behind it, as PoS assets would have already outstripped BTC. While Ethereum has been slow to transition to a much less dense PoS (proof of stake) consensus, people are already using a significant amount of crypto using this method (like Solana and Tezos).
To these you can add non-blockchain technologies such as directed acyclic graphics, which are much lower in power consumption than PoW. Questions about the perceived safety of these alternatives have not gone away, but the fact that we are seeing so many “sustainable” alternatives certainly represents a shift.
People Are Now Mining Cryptocurrency Using Apps
Currently, many developers are trying to offer mining opportunities with very simple applications, especially smartphones. It would not be wrong to say that the Pi Network is a very important example in this regard.
The Pi Network guide by FXCM explains that it uses a simple consensus method where smartphone users can refer others and earn more money in the process. The emphasis on routing has led to accusations that the Pi is a multi-level marketing plan, but it cannot be considered a scam as it does not involve additional costs beyond running a phone. By the way, other light mining options using Algorand or Polkadot are also quite possible on a smartphone.
Problems Caused by Chip Failure May Continue
Yes, fears and even problems of chip shortages persist. Last year’s agenda chip crisis It was thought to decrease this year, but concerns continue from where they left off. According to a report by CNBC, the chip crisis started in 2021 and will continue until 2023. Although cryptocurrencies are often blamed as the main cause of this crisis, it is clear that the tension between the US and China has had a much greater impact.
Although solutions to the chip crisis are frequently on the agenda, the effects of the crisis affect the industry to a large extent at the end of the day. Despite the establishment of new facilities, the trials regarding the supply of raw materials remain unsuccessful and supply chain problems have a significant impact. It is quite understandable that the investments made in factories have not yielded results yet, because such investments generally offer long-term solutions.
It should not be forgotten that cryptocurrency industry is still developing and this path of development will not be an easy one. All the problems and all other factors will naturally create a change, and this change can be largely for the better.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.