Going Green with Chia: True Decentralization and Efficiency
Cryptocurrency mining, especially Bitcoin, is not widely regarded as being energy efficient. Warehouses full of howling, power hungry machines contribute to a significant portion of global power usage.
“Mining one bitcoin in October 2020 requires outputting 0.9–2.4 trillion watts per hour. That’s a lot of power.”
The overall power usage of cryptocurrencies like Bitcoin isn’t trending down either. As the mining difficulty of the network increases along with popularity and price the number of miners coming online skyrockets. When mining just a single Bitcoin is worth over $60,000 there is incredible incentive to be the biggest, fastest and loudest mining pool in the world.
This leads to yet another set of problems. Not only is Bitcoin mining consuming electricity at an astonishing rate, the hashing power stems mostly from a handful of mining pools.
“…current hash rate data shows that 9 out of the top 10 bitcoin mining pools are Chinese pools.”
The promise of complete decentralization and democratization of finance has arguably been lost with popular coins like Bitcoin. The mining pools inside China have access to exceptionally cheap power and hand in glove hardware manufacturing. If one group of miners control a majority portion of the network hash rate then they control the network. This hardly fosters the inclusive, open and community-driven network Satoshi Nakamoto dreamed of.
Throughout the history of cryptocurrency there have been numerous different attempts at creating alternative consensus mechanisms. The original and most popular mechanism currently is proof-of-work (PoW). Bitcoin and many other cryptocurrencies still use this method of securing and validating the network.
Proof-of-work (PoW) relies on miners to perform progressively more difficult hashing functions in order to validate blocks. The…