The amount of electricity required to maintain Bitcoin’s security is legendary. Its miners are scouring the globe searching for areas with the least-expensive electricity rates.
Unfortunately, these areas are where the least expensive renewable-energy resources exist in the world.
Links are provided below to the references to back up the claims made here. This document will be updated as needed based on your comments below.
It has been estimated that the additional electricity required to maintain BlackCoin’s cooperative minting network is much less than three one-thousands ( 3 / 1000 ) of what is now used to run an equivalent sized competitive Bitcoin mining network. Bitcoin’s current electrical consumption equipment arms race is gobbling up irreplaceable, renewable-energy resources in areas where they provide the less expensive renewable energy options bar none.
A recent study cited in the Wall Street Journal shows that the hash rate required for Bitcoin’s security last fall was one one-sixtieth (1 / 60) of what it is now. This hash rate inflation has been fueled by the tremendous profitability of large scale corporate mining operations, which have produced the mining technology arms race.
The largest known corporate Bitcoin mining operation is reported to be housed in a warehouse in Central Washington State where it takes advantage of the US’s lowest electricity rates bar none. The Spokane Review recently reported that a handful of additional competitors are now about to pop up.
Washington State is the leader in hydroelectric generation with 29% of the total national capacity according to the US Energy Information Administration. It is 10th in wind energy production. Nevertheless, the whole state still has the lowest residential electric rates in the country.
The New York Times reported on a similar setup in Iceland, which may have the least expensive electricity of any country in the world. It is powered by hydro and geothermal resources.
These corporate mining operations compete against each other for the right to enter the next ledger page into the Bitcoin blockchain. The startups that produce the otherwise useless mining equipment are forced to make outrageous claims for their latest drawing board designs to get preorder payments to finance their production as has been well documented by CoinDesk in numerous articles.
Are we about to repeat the environmental disasters that followed the 1849 California Gold Rush and the wildcatting boom that began with the Spindletop oil gusher? This trend will continue as long as the Bitcoin mining technology continues to improve at breakneck speed driven by the profitability resulting from the squandering of these irreplaceable resources.
It took three and a half years after Satoshi Nakamoto launched Bitcoin in January 2009 before Sunny King in August 2012 to launch Peercoin, the first environmentally friendly cryptocurrency. However, Peercoin is designed to be the savings account complementing the best environmentally friendly checking account cryptocurrency. The market has been trying since then to settle on the best environmentally friendly challenger for Bitcoin.
The Russian crypto developer rat4 launched BlackCoin on February 24, 2014 at 6:00 UTC after making the customary announcement on February 16 on the Bitcoin Forum. Startup crypto exchange Mintpal quickly recognized the potential of rat4’s improvement of the design of the innovative Mintcoin protocol.
This helped catapult BlackCoin into 19th place in market cap by the start of April. BlackCoin obtained its current 10 th place position after Coinkite chose Blackcoin to add to its terminals in June joining Bitcoin and Litecoin.
Sunny King’s protocol has now been tested on many environmentally friendly alternatives. The market has now chosen BlackCoin to be checking account to Peercoin’s saving account.
The Bitcoin MIT Project will provision every undergraduate at that institution with $100 worth of bitcoins in the fall semester as an experiment. The proposed BlackCoin MIT Airdrop is currently being discussed by the Blackcoin Community on its reddit page. The proposal calls for provisioning each MIT graduate student with $100 of the best environmentally friendly alternative to Bitcoin in the best technology crucible in the world.
It appears from the MIT announcement that the MIT Kerberos & Internet Trust Consortium may have been used as the vehicle for obtaining tax exempt fiat donations. Therefore, should the newly formed BlackCoin Foundation ask the Trust to set up a donation account and let the environmental community try to raise the less than $1 million required to fund the MIT Airdrop.
If you have arrived here from somewhere else and are interested in learning more about BlackCoin and the MIT BlackCoin Project, please join the discussion with us at the BlackCoin subreddit:
Please report proofreading and editing corrections in comments below. References
Electricity requirement calculations needed to maintain the BlackCoin network http://www.reddit.com/blackcoin/comments/25a4fq/if_you_are_good_at_science_or_if_you_are_an/
Wall Street Journal Article on Bitcoin hash rate http://blogs.wsj.com/moneybeat/2014/04/29/bitbeat-for-bitcoin-miners-a-hot-problem-this-summe
Spokane Review Article http://www.spokesman.com/stories/2014/ap26/northwests-cheap-power-drawing-bitcoin-miners/
US Energy Information Administration – Washington State Renewable Energy Report http://www.eia.gov/state/?sid=WA
NT Times Iceland Bitcoin mining article http://dealbook.nytimes.com/2013/12/23/morning-agenda-the-bitcoin-mines-of-iceland/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1
CoinDesk mining equipment articles http://www.coindesk.com/coindesk-mining-roundup-hot-issues-lawsuits-eco-mining/ http://www.coindesk.com/problems-plague-kncminer-broken-super-jupiters-arrive-doorsteps/ http://www.coindesk.com/alpha-technology-initiates-scrypt-asic-tape/
Bitcoin MIT Project article that mentions MIT Kerberos & Internet Trust Consortium http://tech.mit.edu/V134/N22/bitcoin.html
I'm guessing there are a few whale miners, who possess a massive amount of computing power (think supercomputers) who collect a significant portion of the Bitcoins that are spit into the world.
What if the small handful of titan miners possess an unfathomable amount of Bitcoins? For example, the largest declared Bitcoin fortune is possessed by the Winklevoss twins
(who owned 11 million $ in Bitcoins when valued at 120$/btc). Are there undeclared Bitcoin billionaires in possession of 99% or more of the produced Bitcoins?
Does the current market for Bitcoins solely reflect the recreational mining community (who mine to spend on commodities), but ignore the more commercial/investment miners?
Is there a way to figure out whether undeclared whale miners exist?
Help me out here, I'm just trying to gain a firmer grasp on all of this.
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