Something wicked this way comes.

Cryptocurrency News and Public Mining Pools

Something wicked this way comes.

The trouble with mining is its carbon footprint.

That’s…certainly a problem. How can’t it be when shuttered coal mines are fired back up to provide the power for private mining operations? The good news is that longterm, this can have the reverse effect of green energy solution development, or financing. Right? Maybe, which isn’t an acceptable answer given the timeframe science has given us. If physical gold (59M tonnes CO2 annually for mining and recycling) gets displaced by crypto, it might be a net carbon benefit. So yes, carbon is a problem, but no, not the one I’m talking about. The biggest problem with crypto mining is this: The centralization it creates through its economies of scale, which are:

  • access to capital
  • cheap electricity

If we’re talking about Bitcoin, China owns over 60% of its hashpower because of this economy. And because that hashpower is within the borders of a communist entity hellbent on making Orwell’s 1984 reality, it’s a big problem. Without firing a shot, China can now lay claim to having centralized power over a global reserve storage of value. And no, they’ll never lose their hashpower dominance either. Consider their infrastructure expansion and growth, their population and margins. They’ll always have more electrical capacity than any country on earth because of necessity.

I was spooked after the XinJiang power outage last week cut Bitcoin’s hashpower in half. It incidentally exposed things I didn’t like, and the Chinese government’s pro-Bitcoin response afterwards was terrifying. This can mean China will support (weaponize) Bitcoin up the last rungs to heaven until it becomes a crushing threat to western central banks. Or it can syphon trillions over the years by playing hedge fund with a well-leveraged outage here and there, threats here and there of developing Bitcoin’s protocol further…or making good on those threats. Maybe we’ll see another fork or two. What’s certain are the seeds of Bitcoin’s death have been sown. Writing’s on the wall. The many problems it faces are insurmountable, and tragically, it’s failed to become what its original white paper detailed. That’s not what’s most damning though, because Bitcoin works great as a store of value instead of currency. What’s damning is philosophical: Bitcoin has become a tool of the very enemy it promised to abolish.

Thank god for PoS though. It’s much more culturally palatable, and scalable, incentivizing, decentralized.

Right, so eliminating those economies of scale is important work. That leaves the issue of centralized exchanges running staking nodes ad infinitum. Good news is DeFi promises to remedy this initially (think RocketPool’s forthcoming solution). But longterm, the 32 ETH required to run a validator node will fall to 1 ETH or less. As well, the technical friction (or steps) to run a node will collapse proportionately. There will be no incentive to stake your assets on a CEX (centralized exchange) or within a large mining pool. You’ll be earning fewer rewards and accruing other various fees. Alas, a middle-man’s purpose is to make themselves a necessary evil. Thankfully, there’s a dapp for that.

Ethereum’s network rewards participation. The simplest example of this is well, staking. ERC tokens are not for cold-storage in a hardware wallet that gets locked in a fireproof safe. They’ll do less for you and the network in limbo. Consider those applications on your iPhone’s screen, the Facebook, Twitter, Amazon, etcetera. They are not open-source. They silo their data. Dapps are the exact opposite. Anyone can copy or improve them. Anyone can issue their own token(s). This has lead to an explosion in growth, experimentation, and a robust ecosystem. Data and ideas democratized. A touchstone of decentralization. Right now, our protocol is young and only working out the financial cement base layer where ETH is but the native currency. What’s built above this is where things get sci-if.


Remember when I said Ethereum’s network rewards ($) participation? Well your iPhone applications profit off your participation. This then, I propose, should be called The Flippening, not the hunt to flip Bitcoin’s market capitalization.

submitted by /u/Shatter_Hand
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