Bitcoin Mining: Research Suggests Optical Computers Are Much More Energy Efficient
An optical Proof-of-Work (PoW) architecture proposed by students of Cambridge, Columbia University and the French CNRS is supposed to solve the mining problem that tackles Bitcoin’s existential aspect as time passes, block rewards halve, and hash-rates increase.
Some speculations suggest that more than 50% of the world’s electricity consumption could be dedicated to cryptocurrency miners, and/or mining facilities, with an emphasis on Bitcoin mining.
Essentials of Bitcoin mining
In a nutshell, Bitcoin mining refers to the process under which new Bitcoin’s are minted as a reward for block-miners’ computational work in the Bitcoin blockchain.
Unlike traditional inflationary fiat currencies, where the centralized issuer of the currency can basically print as much money as it pleases, Satoshi Nakamoto, the pseudonymous creator of Bitcoin has fixed the total amount of BTC that can ever exist to 21 million units, making it the first deflationary digital currency,
Now, obviously, Bitcoin is not created by thin-air. The mining process was initially set to release 50 BTC to the market each time a new block was minted, and this number is subject to an algorithm that would halve the reward amount every 210,000 blocks, or approximately every 4 years.
Today, the block reward is equivalent to 12.5 BTC, after the 2012, and the 2016 halving respectively, and the next Bitcoin halving is set to occur in May 2020, where the reward for a miner who successfully managed to solve a complex mathematical problem as part of the integrity of the decentralized network, will be fixed to 6.25 BTC.
The thing with halving is that it not only shortens the amount of BTC circulated in the broader market, but it also increases exponentially the hash-rate, or simply the processing power required to tackle the math problems behind Bitcoin’s sophisticated encryption.
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With the passage of time, this turned Bitcoin mining from something you could do with your laptop, to multi-million dollar ventures that utilize thousands of mining-tailored hardware and software to keep up the pace of the network’s evolution.
Not only it is essentially impossible to mine Bitcoin with your personal computer nowadays, but even some of the largest mining operations are shutting down, due to bigger competition, and lack of optimization.
While the electricity-consumption aspect was not a thing to consider in the early days of Bitcoin, nowadays, mining pools are practically relying their operations upon countries that offer cheap power, creating a possibly unintended geographical monopoly.
According to the halving algorithm, as set by Satoshi Nakamoto, and even when more than 80% of Bitcoins are already out there, the last BTC will not be minted before the middle of the next century.
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Can photonic chips save Bitcoin?
Three university students, Michael Dubrovsky from PoWX, Marshall Ball from Columbia, and Bogdan Penkovsky at the University of Paris-Saclay in France published a joint research paper called “Optical Proof of Work”, explaining how Bitcoin mining could be more energy-efficient using custom-made integrated circuits as showcased in the citation.
The team of researches said that the proposed solution might be ‘computationally expensive’, but it is certainly much more energy-efficient, while it is also compatible with the current Bitcoin encryption protocols, making it an ideal addition in future system updates.
According to their claims, using optical computers instead of traditional computing resources will significantly decrease the energy-consumption level required by the mining industry.
The truth is that computation as a concept is energy-intensive, and the mining industry had previously attempted to provide a better alternative to traditional computing systems, and ASIC chips (application-specific integrated circuits), such as AntMiners were considered as the optimal option by the majority of the scene.
Other alternatives, which are more practical than hardware-dependent, suggested that finding a geo-location with relatively cool temperature and cheap electricity is one of the aspects mining startups and pre-established companies should pay attention to when involved with cryptocurrency mining.
The team of students behind the recent proposal, suggests that rapid developments in photonic chip technology are now offering better results efficiency-wise when compared to silicon ICs.
More specifically Dubrovsky says that “The promise of the technology, is to offer 2-3 orders of magnitude better energy efficiency over electronic processors”.
Concluding, it seems that unfortunately, there is no way-around mining and extreme energy-consumption when it comes to PoW consensus mechanism architectures, but solutions such as ASICs, or Photonic Chips can make the process more efficient, granting some space under the invisible global energy-consumption bottleneck.