Bitcoin Mining Revolution Proposed by Researchers - BeInCrypto

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• Bitcoin Mining Revolution Proposed by Researchers - BeInCrypto
• Bitcoin’s Ultimate Price Floor Could Soon Be Destroyed - Forbes
• Former Soviet Metal Construction Plant Is Now Mining Bitcoin - Cointelegraph

Bitcoin Mining Revolution Proposed by Researchers - BeInCrypto Posted: 27 Nov 2019 05:24 AM PST A group of researchers has authored a paper proposing a new Bitcoin mining method to make it less energy-intensive and cheaper. Its new proof-of-work system moves costs from electricity to hardware. It's no surprise that Bitcoin, today, uses a lot of energy, particularly electricity. Hashcash proof-of-work has successfully secured Bitcoin's network since the beginnings. However, it has run into problems as of late: scalability problems environmental concerns greater systemic risks among the diminishing number of mining participants What is the solution? Can we make Bitcoin mining cheaper, more fair, and cleaner? According to one group of researchers, we absolutely can. Proposing a New Proof-of-Work System for Bitcoin Earlier this month, Michael Dubrovsky (cofounder of the nonprofit foundation PoWx), Marshall Ball from Columbia University, and Bogdan Penkovsky of the University of Paris-Saclay in France proposed a radically new system. The proposal centers on photonic chips, optical computers, and a revision to the existing encryption protocol to offset Bitcoin's current reliance on electricity. As it stands now, Bitcoin's hashrate is dependent on mining facilities located in nations with low electricity costs. This has naturally created single points of failure. The alternative is what these researchers call 'optical proof-of-work.' (OPoW). As explained in the paper, the costs of mining in this system would be on the hardware used and not primarily the electricity. The changes to existing proof-of-work would be minimal. It works something like this: miners would be incentivized to use better and better technology, which they have been neglecting until now. The authors mention silicon photonics as making strides in the last two decades. These integrated circuits rely on photons instead of electrons for computation tasks — allowing for low-energy 'deep learning.' Being now sold on commercial markets, oPoW would precisely rely on energy-efficient photonics for validating transactions. The end result is cheaper and less energy-intensive mining across the board with miners being incentivized to purchase photonics rather than electrical miners. Crypto Market Ramifications Bitcoin is now powered by electricity — but what if the hardware was the main factor behind profitability? It's an idea which, if implemented, would have drastic ramifications for the market at large. For starters, implementing such a system would break up the Chinese oligarchic-type control of Bitcoin's current mining farms. This, in turn, would move Bitcoin mining away from riskier countries with the cheapest electricity and would instead be based in nations with the greatest technological output. Those nations that produce photonics would benefit most. Secondly, with electricity no longer being Bitcoin's 'fuel,' OPoW consensus would mean that drops in Bitcoin's price would not necessarily imply a drop in hashrate. Lastly, there is much talk of Bitcoin's current miners establishing a sort of 'price floor.' If OPoW was implemented, it is possible we could see this floor drop further if we enter a bearish market. This is because costs would be far less which would cause downward pressure on Bitcoin's traded price. Images courtesy of Shutterstock. Did you know you can trade sign-up to trade Bitcoin and many leading altcoins with a multiplier of up to 100x on a safe and secure exchange with the lowest fees — with only an email address? Well, now you do! Click here to get started on StormGain!

Bitcoin’s Ultimate Price Floor Could Soon Be Destroyed - Forbes Posted: 26 Nov 2019 04:29 AM PST Bitcoin and cryptocurrency prices have swung wildly over the last few months following a huge rally in the first half of the year. The bitcoin price has somewhat recovered from a disastrous bear market in 2018 which saw bitcoin touch lows of a little over $3,000—thought to be just under the price of creating (or mining) new bitcoin and making energy-intensive mining operations unsustainable. Now, a group of researchers have come up with what they claim is a cheaper and more energy efficient way to mine bitcoin that could mean the previous bitcoin price floor moves far lower. Bitcoin are rewarded to miners who contribute to the bitcoin network's encryption process but the ... [+] costs of doing so are high. Some think these high costs have added bitcoin's massive price increase over recent years. © 2018 Bloomberg Finance LP Earlier this month, Michael Dubrovsky, cofounder of the nonprofit foundation PoWx, Marshall Ball from Columbia University in New York, and Bogdan Penkovsky of the University of Paris-Saclay in France, published a paper that claims a switch to photonic-chips, optical computers, and a revised encryption protocol, called HeavyHash, could make bitcoin mining less energy-hungry and, in turn, cheaper. "Heavy reliance on electricity has created scalability issues, environmental concerns, and systemic risks" for bitcoin, the researchers wrote, arguing bitcoin's so-called proof of work, which is how bitcoin miners' work is measured and rewarded with bitcoin, should be replaced with what they call an optical proof of work algorithm. "Mining efforts have concentrated in areas with low electricity costs, creating single points of failure. Although proof of work security properties rely on imposing a trivially verifiable economic cost on miners, there is no fundamental reason for it to consist primarily of electricity cost." Bitcoin's huge energy costs have been a worry for the crypto industry for some time. This summer, researchers at Cambridge University found bitcoin consumes more energy than the whole of Switzerland. The global bitcoin network was found to require more than seven gigawatts of electricity, adding up to around 64 terawatt hours of energy consumption over a year. The newly suggested optical proof of work could "eliminate energy as the primary cost of mining," moving the cost of bitcoin mining to hardware, rather than electricity. According to Dubrovsky and his colleagues, a switch to optical proof of work, made possible by "rapid growth and improvement in silicon photonics over the last two decades," would also improve network scalability, enable decentralized mining outside of low electricity cost areas, democratize issuance, and prevent the bitcoin hashrate from being as sensitive to underlying coin price declines. The bitcoin price fell as low as $3,000 per bitcoin late last year, which some think is as low as it ... [+] can go due to the mining cost of bitcoin. Coinbase If the price of bitcoin mining does move lower as a result of a change to optical proof of work, the bitcoin price could move below the $3,000 it dropped to 12 months ago before miners were forced to switch off their machines. However, some in the bitcoin and cryptocurrency industry do not expect the bitcoin price to fall as low as it did last year again, meaning the price of bitcoin mining might not be tested. "Currently the market is testing the lows, not because of China (the China news has been a thing since 2011 and it never really has any major sway on the market) but because we tested the highs, it's as simple as that," said George McDonaugh, managing director of publicly listed bitcoin, cryptocurrency, and blockchain investment firm KR1 . "We essentially went from $5,000 dollars to $13,500 in 3 months and now, like the swing of a pendulum, the market wants to know where the bottom is again. In my opinion we are in the early stages of a bull market, you'll see that the bottom this time around is much higher than $5,000. We will find higher lows all the way back to all-time highs."

Former Soviet Metal Construction Plant Is Now Mining Bitcoin - Cointelegraph Posted: 24 Nov 2019 11:39 PM PST The largest data center in the former Soviet Union, BitRiver, opened about a year ago in the Siberian city of Bratsk and most of its clients use the facility to mine Bitcoin (BTC), Bloomberg reported on Nov. 24. The data center allows cryptocurrency miners to take advantage of cheap energy in what once used to be the world's largest aluminum smelter. The plant was built by the USSR in the 1960s with the still-active hydropower plant to power its operations. Cold climate, cheap energy The data center's location also benefits from a cold climate, allowing mining hardware to work at higher efficiency rates while cutting cooling costs. Billionaire and president of the world's second-largest aluminum company Rusal, Oleg Deripaska, reportedly had the idea of building the data center about five years ago and directed his company Rusal alongside aluminum and power producer En+ to repurpose the facilities.  BitRiver told Cointelegraph in an email that Deripaska's En+ is currently a strategic partner. En+ supplies up to 100 megawatts of power to the facility, enough energy to sustain 100,000 homes. The plant is one of the largest hydropower plants in Russia and the data center allows it to constantly sell excess energy and diversify its client base. According to Bloomberg, Russian law does not recognize cryptocurrency mining. Because of this legal gray area, Bitriver does not directly engage in mining, but only provides equipment and technical services to its clients — including from Japan, China and the United States — operating like any other data center. Bitcoin miners unfazed by BTC price drop Bitcoin and the overall cryptocurrency market saw a significant drop in price earlier this week, as BTC briefly fell under $7,000. Still, miners are seemingly keen to continue boosting their capacity. "There is NO miner capitulation," commented Bitcoin entrepreneur Alistair Milne on Sunday following a rise in network hash rate and expected difficulty hike. He continued:  "They are acutely aware of the upcoming halving and are apparently unphased by the recent dip." As Cointelegraph reported earlier this week, German Bitcoin mining firm Northern Bitcoin has entered a merger agreement with United States-based competitor Whinstone to jointly build what will supposedly be the world's largest mining farm. Update: the original version of this article incorrectly stated that Oleg Deripaska is the biggest shareholder in Bitriver. The article has since been corrected to remove this unverified claim.

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