Crypto mining has ended for good or is it too late?
Muhammed Rayhaan | July 18th 2022
Source: SectigoStore
Introduction
Cryptocurrencies has taken the world by storm ever since it was invented inn 2009, but since then, it has just been an alternate form of wealth, something in which you can invest. In fact, it was only a concept which people with profound knowledge in both the field of science and commerce understood completely, while the lay man had their set of doubts, until 2019. At this time, which some would describe as fortunate, while most, unfortunate, a disaster struck upon earth, putting everyone at imminent danger, not just of life, but economically and emotionally.
The Economic World experienced once its worst nightmares at the onset of the Covid Pandemic. The stock market tumbled to the lowest of lows in the decade. National economic slowed. Prices of everyday commodities declined, Borders shut, leading to shortages. Employment was hard struck, thousands went unemployed.
But what does any of this have to do with Crypto Mining? Well, while all sectors began to fall, the only one that was self-sustainable was the Crypto industry. And as people looked for an alternate source of income, crypto showed an array of hope, a way to earn with minimal risk, and naturally people turned to it.
Source: Viperatech
What is Mining and Why Mining?
Before we move on to what mining is, let us discuss the why. If the crypto market was thriving, why not just invest? Why mine? Well, let us look at investments. While both require a decent amount of starting capital, the proportion of investment to reward an investment is lesser in comparison. Also, since crypto is actively traded in the market like stocks, and they are traded 24/7 non-stop, they are subject to movement both ways, upward and downward.
Mining provides the solution. While mining also requires heavy investment to get the required compute power and electricity, mining does not involve anything do with the public market, it is a guaranteed profit machine, it is close to impossible to make losses in mining, and it is constant. These confirmed advantages almost outweigh the entire investment side.
But how can there be a close to 100% profit guarantee? You must think this is a fraud. Since it is not trading, you can rule out all kinds of related losses. The method by which Bitcoin and other cryptocurrencies are generated and the transactions involving new coins are verified is known as mining. It entails massive, decentralized networks of computers all over the world that verify and safeguard blockchains, which are virtual ledgers that record crypto transactions.
So, every time a transaction of such is complete, the miner earns a proportionate amount of money, and this source is constant. If cryptocurrencies exist, mining shall continue to be profitable. So, it is decided, right? Mining clearly wins, or does it?
What has mining done?
Let us start with a simple one, the Global Semiconductor Chip Shortage. As people discovered the otherwise untamed benefits of mining, the increasing investment in computers and therefore, chip technology to conduct mining led to a huge shortage of silicon chips globally. Automotive and consumer electronics industries took a setback to this, as prices of the same skyrocketed. It has taken a good three years for prices to return to MSRP, as we see today.
Besides demand-based shortages, we have a power consumption of mining. The Cambridge Bitcoin Electricity Consumption Index estimated 85 TWh to 218b TWh of power consumption, more than the entire power usage of Finland and Denmark.
As fossil fuels are the most common source of energy in most countries, the carbon footprint is massive. Digiconomist, a crypto analytic site, estimates seventy-eight million metric tons of Carbon Dioxide to be released by Bitcoin Miners Yearly.
As mining hardware becomes obsolete over time, the effect of crypto mining on the environment extends beyond just air pollution, due to the generation of e-waste. Digiconomist once again estimates 36,000 tons of e-waste every year by Bitcoin miners.
Source: The Motley Fool
Has Mining stopped, and are we too late?
Well, it seems as if unfortunately, mining is still on the rise. Although the crypto market has taken a big hit and cryptos have dropped to below half the value of their all-time high, miners do not seem to hesitate in moving forward. The situation has improved for the better though, as chip productions rise, and prices return to normal.
The environmental problems of mining though, cannot be considered better. The damage by mining is already done, and it is not going to stop. So, we just must brace ourselves and hope things become better.