Ripple’s XRP was the first well-known cryptocurrency in which all the tokens were pre-mined before it went live. This wasn’t a very popular feature among the more hardcore Bitcoin and Ethereum fans. For them, the mining process is every bit as important and essential for a digital asset as the market price itself. Or maybe the concept was too different within the cryptoverse (which was a much smaller universe back then) and change always prompts some kind of discomfort.
That mindset hasn’t disappeared yet. This author has spoken with several investors in the cryptocurrency market who still dislike projects like Ripple or Tron just because they can’t join the mining process –for the simple reason that there isn’t any. Not much an argument is offered for that. The most common explanation so far has been “it’s because I used to do so well mining in the past”.
But is lack of mining such a bad thing, honestly? Let’s try and have a dispassionate look at the mining paradigm. The conclusions could surprise you.
The first question we need to answer is: what is the point in mining bitcoins or any other cryptocurrency, anyway? You could say that it’s to create new tokens. You’d be wrong.
The point in mining is to create new usable blocks to keep the blockchain growing. That’s the reason mining exists. In most projects, creating a new block requires the solution of a very complicated cryptographic problem called SHA-256 collision. Giving tokens as incentives so that the problem gets solved is exactly that, an incentive, but the thing the network really needs and wants is a new block. In this site, we’ve published many articles explaining the mining process and the mathematics involved in detail so we’re not going to go very deep into that this time.
The relevant point we want to make is that solving the collision is incredibly hard because it has no analytical solution. In other words, there is no formula that allows you to feed it some data and get the right answer.
You can only solve it by a very protracted process of trial and error, and it’s so complicated that current computers would need centuries to solve just one (which is why mining is now done with specialized ASIC hardware). You need a huge number of trials and errors before you can solve the problem, and that means that this is a very energy-intensive process.
It also happens that the Bitcoin mining network is huge. According to Bitnodes.earn.com (a website developed to estimate the size of Bitcoin’s network), there are 10155 reachable networks in the Bitcoin network as we write this article. How much electric power is this gargantuan network burning? Well, according to an estimation published last year by The Economist, Bitcoin is using as much electricity as Ireland.
This is terrible news for the Earth. Bitcoin is demanding the same amount of electricity as a whole country. Which means that some of the pollution and CO2 emissions in the world today can be traced directly to Bitcoin. In a world that’s already lining up to face an ecological crisis, one has to wonder if all this energy is worth spending in keeping a cryptocurrency alive.
Tron, on the other hand, doesn’t need mining. The Tron network spends exactly zero watts per hour in its mining process because it doesn’t have one. You can’t waste any energy in something you’re just not doing at all.
Next time you think about which digital asset you’d like to support, buy or hold, think about this: Tron sees the big picture. It’s green. And the same can be said about any other blockchain project that doesn’t need any mining.
We all want the economic independence and decentralization from the traditional financial system that crypto will bring us, sooner or later. But that won’t be very useful if we don’t have a planet in which we can use it.
[Image courtesy of Flickr]
Disclaimer: All information provided through this article should not be regarded as investment advice, nor should be taken for granted for crypto trading purposes. Before making any investment or trading plans, make sure to inquire about the information diligently by carrying out your very own research. Thank you.