The chain of blocks needs a lot of energy.
The great fall in 2018 in the value of cryptocurrency has led not only to the loss of investors, but also to a serious crisis for manufacturers of mining equipment and processors. Mainly such high and steady growth was not expected, and the market faced significant overcapacity. Energy companies, which are accustomed to receiving good revenues from miners, also suffered some losses, although in energy-deficient regions the authorities have to take steps to close down the mining business.
China’s mining pools solve the problem radically, eliminating unnecessary equipment. Startup ConsenSys and AMD chip manufacturer have signed a crisis management agreement to create a cloud blockchain services platform. In this way, the partners will take care of the released employees and charge the excess computing power. Market participants are trying to adapt to new realities.
In fact, the cryptography business has faced a new and serious challenge: the blatant energy inefficiency of a chain of blocks based on mining. A reasonable question arises: do the benefits of the “traditional” blockchain outweigh the global energy costs? We will also add the costs of very specific mining equipment optimized for one type of calculation. I have serious doubts about that.
However, it is not a fact that the functionality of the block chain can only be implemented in this way. In principle, existing technologies will make it possible to create records with a sufficient level of protection and reliability: they are more expensive in the development phase, but generally cheaper in the exploitation process.
What happens in the blockchain?
The users and exploiters of the blockchain are waiting for an exciting process of technological evolution to reduce energy consumption and increase the speed of processing operations. Anyway, the chain of blocks will have to fight for the right to exist.