How Is Mining Effecting Bitcoin’s Decentralization?

Do you see the 5 nanometre limit of transistors as a good thing for decentralization? There's been an enormous increase in the hashing capacity of the Bitcoin network and now it's slammed into Moore's Wall. It's a very good thing because it extends the shelf-life of mining equipment from 2-3 months to 3-4 years. Until now, the determinant of success in mining was how many kilometres you were from the semiconductor fabrication lab and how fast you could hook it up to 50 megawatts of electricity. With a 4-year shelf-life, you can re-decentralize mining. Renewable energy with cycles of demand, using extra megawatt hours with low consumption that would be lost anyway to mine bitcoin. Bitcoin is a battery on a virtual blockchain.

Do you see the 5 nanometer transistor limit as being a good or bad thing for decentralization?

I think it is a really good thing. We have seen an enormous increase in the hashing capacity of Bitcoin’s proof-of-work network.

It has been catching up to Moore’s Law, and now it has slammed into what appears to be Moore’s Wall.

This is a very good thing for decentralization. What it does is it extends the shelf life of mining equipment from two to three months of usable life cycle, to three-four years, which levels the playing field across all participants in the system.

Until now, the determinant of success in mining was, how many miles were you from the fabrication lab? How fast could you get that equipment out of the lab, onto a truck or shipping boat, and into your warehouse… and hook it up to 50 megawatts of electricity?

That means most miners were within about 500 miles of the semiconductor fabrication lab. If you tried to put it on a ship and move across the water, it would leave your shores as a fantastic equipment, but by the time it arrives in California three months later, it is scrap metal.

But if you have a four-year shelf life, you can now re-decentralize mining and take advantage of differences in electricity cost. One of the really interesting opportunities is using renewable energy with cycles of demand in it.

For example, if you have energy production from solar or wind, or production from hydro which is more fixed, because you have a certain amount of megawatt hours that will come out of your pipe all the time, while the consumption in the distribution network changes over the day.

What should you do with the excess capacity? One opportunity to think about is using that excess capacity to mine bitcoin, when it is not being consumed elsewhere.

Essentially it is the energy you would be generating anyway that would be completely lost, but now you convert it into Bitcoin.

Effectively, the Bitcoin is a battery, on the virtual blockchain.

About the author

Satoshi Nakamoto

We developed bitcoin. This post is derivated from aantoop yt video with same headline under cc by license.

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