Cryptomining has always been in the headlines, all thanks to the energy it consumes. A recent study conducted by Nature Sustainability, a scientific journal, revealed that crypto mining consumes more energy when compared to mineral mining to produce the same market value.
But all is not wrong with crypto mining, it has its own share of advantages too that could prove to be highly beneficial for the society in the long run.
In this article, we will understand how crypto mining works, and how it benefits society. Let’s get started.
How Cryptomining Works?
As a matter of fact, cryptocurrency is not regulated or authorized by a government or bank. Transactions are stored in blocks which are linked together to form the blockchain. To validate and authorize these transactions, complex mathematical equations must be solved.
This entire process of solving complex algorithms is called mining. Crypto miners solve these algorithms with the benefit of getting rewarded, in the form of cryptocurrency.
Although crypto mining is often linked with too much energy consumption, it has its own advantages too.
Advantages of Mining Cryptocurrency
- Full-time career: Since cryptomining is all about mining cryptocurrencies, it could prove to be a profitable process. If one master the art of cryptomining, and practices it full-fledged, it can even turn out to be a wonderful fulltime employment opportunity.
- Best way to get coins: While the traditional currency like the euro or dollar is released by central banks, cryptocurrency is different. Miners can mine the cryptocurrencies and get the coins based on the issuance rate set in the code. This way, miners cannot cheat the system and create cryptocurrencies out of thin air. They will have to use their computing power to generate cryptocurrencies. But cryptomining makes it easier for the miners to own the coins.
- Cost-effective: When compared to buying cryptocurrencies, mining them proves to be more cost-effective. Although the upfront costs involved in mining are high, all thanks to the expensive mining equipment, the subsequent costs are way lesser. If done correctly, mining could turn out to be a cheaper and scalable option when compared to buying cryptocurrencies. Further, mining also rules out the risks involved in buying a cryptocurrency which if loses its value translates to the loss of the investor. But this is not the case with mining. Even if the mined cryptocurrency loses its value in the worst case, the equipment used for mining purposes will still stay valuable.
- Enhanced security: As cryptocurrencies are going mainstream, and more and more people are adopting them whole-heartedly, there is an increased pressure on the authorities to ensure their security. Users are highly recommended to store their cryptocurrencies in a digital wallet. Further, they should also use a reliable VPN like PureVPN (read full review here). A VPN protects your online identity and prevents it from getting trespassed by third parties. While cryptocurrencies can be kept secure at an individual level, ensuring the safety of the entire blockchain network is challenging.Thankfully, cryptomining takes care of this aspect too. As more and more miners try mining, they contribute hash power to the network which makes it less vulnerable to the cyber-attacks. This is because cybercriminals need to exercise control over at least more than half of the mining equipment in order to disrupt the network. As more and more miners keep on joining the network, this probability reduces to zero.All in all, cryptomining adds to the stability of the network.
- Positive social engineering: You might not have seen this coming but cryptomining can also be used to drive social engineering. There are various ventures which are in the process of examining use cases that utilize the transaction validation process instead of only creating cryptocurrency tokens.Thus, mining nodes can actually be put to good use to study large amounts of data created during the process of cryptomining. These predictions and conclusions can prove to be highly useful for healthcare, logistics, manufacturing, and other industries.
Thus, the next time someone says that cryptomining is destroying the planet, educate them with all the benefits that it is providing. What’s more, if a report by Coinshares is to be believed, 78% of bitcoin miners actually use renewable energy to power their mining operations, thus preventing surplus electricity from getting wasted.
A lot of work is currently going on in this direction. That said, recently Intel won a patent for energy-efficient bitcoin mining. Thus, it is safe to conclude that mining is slowly moving towards energy conservation, and is constantly exploring the alternative options to become more environment-friendly.
What are your views on the benefits of cryptomining? Do let us know in the comments below.