Total shutdown of mining farms What’s really wrong with bitcoin miners?

Is this king, “damned” or “wrongly killed”?

It is interesting to note that a while ago, the State Council Financial Committee issued a big news about the cryptocurrency circle, the big bomb has not yet landed, the cryptocurrency circle is dyed red.

The first thing that happened was that a bunch of people sent me greetings.

The first thing you need to do is to ask if you’re going to be able to cash in or take the bottom.

The people outside the circle also asked: How are you doing? Did you lose money? Is it bankrupt?

The insiders will not say, before the 94, after the 312, are immune to the news, cash and bottoming out is just a matter of earning more and earning less.

But —– outsiders this series of “greetings” directly confused me, tell the truth, I’m afraid you’re sad; do not tell the truth, I’m sorry for my conscience.

But what I find most interesting is not this sour greeting, but the release time of this big news – 521

Don’t worry, Uncle Kan is a rational person and will not say anything like “how can you send such a terrible message on such a loving day”.

I want to emphasize that releasing this news on the day before May 22 is really meaningful!

If the harshest punishment is to kill the heart, then May 22 is the “heart” of bitcoin.

If Bitcoin’s consensus has a starting point, then 522 is that starting point.

Why?

The story begins 11 years ago at noon, when Laszlo Hanyets, a programmer living in Florida, posted on a Bitcoin forum.

“I want to buy 2 pizzas for 10,000 bitcoins, who wants to take the order?”

It is interesting to note that a while ago, the State Council Financial Committee issued a big news about the cryptocurrency circle, the big bomb has not yet landed, the cryptocurrency circle is dyed red.

The first thing that happened was that a bunch of people sent me greetings.

The first thing you need to do is to ask if you’re going to be able to cash in or take the bottom.

The people outside the circle also asked: How are you doing? Did you lose money? Is it bankrupt?

The insiders will not say, before the 94, after the 312, are immune to the news, cash and bottoming out is just a matter of earning more and earning less.

But —– outsiders this series of “greetings” directly confused me, tell the truth, I’m afraid you’re sad; do not tell the truth, I’m sorry for my conscience.

But what I find most interesting is not this sour greeting, but the release time of this big news – 521

Don’t worry, Uncle Kan is a rational person and will not say anything like “how can you send such a terrible message on such a loving day”.

I want to emphasize that releasing this news on the day before May 22 is really meaningful!

If the harshest punishment is to kill the heart, then May 22 is the “heart” of bitcoin.

If Bitcoin’s consensus has a starting point, then 522 is that starting point.

Why?

The story begins 11 years ago at noon, when Laszlo Hanyets, a programmer living in Florida, posted on a Bitcoin forum.

“I want to buy 2 pizzas for 10,000 bitcoins, who wants to take the order?”

Total shutdown of mining farms What's really wrong with bitcoin miners?

You know, when the treatment of bitcoin can not be as good as now, not to mention the exchange of pizza, even heard of few people. The post went cold for a long time, until 6 pm before someone began to ask for the address, after chatting a few sentences to see the single to become, but the other party even canceled.

This post so hung for more than four days, until May 22nd at 7:00 pm, Laszlo old brother announced with excitement.

“I managed to buy 2 pizzas with 10,000 bitcoins. There are pictures with the truth!”

Total shutdown of mining farms What's really wrong with bitcoin miners?

From the photo you can really feel the excitement of this dude raising his family to celebrate. But to look at the current price of bitcoin and this photo together P, it seems that the smile is tinged with a touch of embarrassment, right?

But then again, Bitcoin is where it is today thanks to this dude. There were no exchanges, no wallets, and no one believed it could be exchanged for anything in the real world, and no one had a price for it.

So May 22nd was a special day when bitcoin evolved from a “joy bean” to a currency and interacted with the real world.

It was also the day that bitcoin first traded at $0.004 per unit, and it was the day that people started planting the consensus that “bitcoin has value”.

This time, we are thinking about the irony of the release date of this “crackdown on bitcoin mining” news.

I guess if there was a time machine, some powerful force would have wanted to send this message 11 years ago to 521 and then dust Bitcoin off in Pandora’s Box forever.

But the funny thing about life is that there are no ifs, ands, or reversals, or time machines. The box has been opened, bitcoin has brought value out, and with it comes energy consumption.

Bitcoin is said to be an “electricity tiger”, so how much electricity is used for bitcoin mining?
According to the Centre for Alternative Finance at the University of Cambridge, as of May 17, 2021, the annual electricity consumption of global bitcoin “mining” is approximately 134.89 billion kWh.

If you consider Bitcoin as a “country,” it ranks 27th in the global ranking of countries in terms of electricity consumption, already consuming more electricity than Sweden.

And some scientists predict that the Bitcoin system is expected to consume 96% of the UK’s energy in 2024, surpassing Saudi Arabia, Italy, Mexico, Spain and other major countries in the world.

Total shutdown of mining farms What's really wrong with bitcoin miners?

Here’s the question, why is bitcoin mining so power hungry? How does mining work?

If you want to understand these issues, you have to come to a science fiction, originally I wanted to start with the history of the currency, but thought better of it, a professional science fiction web search a whole lot, what Byzantium, P2P, hash algorithm, timestamp —— a random term can dissuade people.

But in fact, the principle of mining is very simple, suppose I have 21 bills with a face value of 100, each bill has an exclusive number, now, please guess the last digit of the sixth bill number from the left in my hand, and the number you guess to the pop-up, who is the fastest guess, I will give the money to whom.

If you participate in this game, you are actually participating in a “mining”, you guess the random numbers through the brain and guess the correct process to get the reward, called “mining”. Your brain is equivalent to the “mining machine”, and you guess the speed of random numbers, equivalent to the “arithmetic”.

Here, the mechanism that rewards whoever counts faster is called “POW proof of workload mechanism”. If you are guessing by yourself, it is called “personal mining”, if you gather a group of people in a room with you to guess, the room is called “mining”.

The only difference in the process of bitcoin mining is that it is not calculated by the human brain, but by a high performance brain such as Beida Wei Shen! In the mining world, it’s called a professional chip miner, and it looks like this.

Total shutdown of mining farms What's really wrong with bitcoin miners?

So the core of bitcoin mining spells equipment, and whoever has a better performance mining machine and whoever digs more gets more bitcoin rewards.

So why is bitcoin mining so power hungry?
The reason is simple: unlike other electrical devices, mining machines run 24 hours a day, year round, as long as there are no power outages or failures.

Let’s assume that a mining machine consumes 2 degrees of electricity per hour, then under normal circumstances, a mining machine consumes 22430=1440 degrees of electricity a month. Normal household electricity is between 200-400 degrees a month, so a mining machine is equivalent to half a year of household use, not to mention the tens of thousands of mining machine mines?

Total shutdown of mining farms What's really wrong with bitcoin miners?

In addition to the power consumption of the mining machine itself, the mining machine in the mine is densely stacked, in addition to power consumption, there will be a lot of heat dissipation, which means that the mine must be equipped with large fans ventilation and heat dissipation, an ordinary three large fan power of about 1000 watts – 2000 watts, assuming that in the four corners of the mine parties a, the power is about 4000-8000 watts, of course, in addition to cooling equipment, some network equipment and In addition to cooling equipment, of course, some network equipment and monitoring equipment power consumption should also be counted, so together, the power consumption of bitcoin mining is very large.

Total shutdown of mining farms What's really wrong with bitcoin miners?

After the science is finished, let’s finally talk about the impact that this policy may bring to the coin circle

1, the workload as proof of the coin, may face elimination or transformation

As I said earlier, bitcoin mining uses the POW workload proof mechanism, that is, who sweats more, who gains more. Such a rule makes it a hindrance to carbon emissions, which is a global agreement for almost all countries.

Satoshi Nakamoto didn’t realize this larger context when he set up Bitcoin in 2009, so it’s likely that coins with proof-of-workload are facing elimination or transformation in the cryptocurrency world.

And there are more consensus mechanisms in the cryptocurrency world than just proof of workload, there is also proof of equity represented by Ether 2.0, proof of share authorization represented by EOS, proof of capacity represented by Filecoin, and so on. The market share squeezed out by proof of workload will be filled by other consensus mechanisms.

2, the mining difficulty is reduced, which may bring a selloff

With the big-level impact out of the way, let’s talk about the possible impact on bitcoin’s coin price. According to data tracking site BTC.com, bitcoin’s mining difficulty plummeted 15.97% on May 30, compared to an all-time high on May 13, marking the most dramatic drop in difficulty this year.

Total shutdown of mining farms What's really wrong with bitcoin miners?

If the subsequent specific rectification policy regarding mining sites is landed, it is expected that the arithmetic power will continue to drop, which means that the difficulty of mining will continue to drop. Then with the fixed annual production of bitcoin, the difficulty of mining is reduced and the same cost of electricity, the miners can dig more coins, which will then inevitably bring a wave of selling pressure.

Many people say that the main purpose of this regulation is not to crack down on bitcoin, but the fickle market of cottage coins flying around a while ago. But the difficulty of regulation is too great, so the thief first to catch the king, to crack down on bitcoin mining and trading.

But this king, in the end, is “damned” or “wrongly killed”?

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/total-shutdown-of-mining-farms-whats-really-wrong-with-bitcoin-miners/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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