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Let me tell you an interesting story. Didn’t the Financial Committee of the State Council release a big news about the cryptocurrency world a while ago? Before the big bomb even landed, the cryptocurrency world was already dyed red.
Then something interesting happened. A bunch of people sent me greetings right away.
Everyone in the industry asked the same question: Cash out or buy at the bottom?
People outside the circle also asked in unison: Are you okay? Did you lose money? Are you bankrupt?
Not to mention the people in the industry, with 94 before and 312 after, they are immune to news. Cashing out and bottom fishing are nothing more than a matter of how much profit they can make.
But...this series of "greetings" from people outside the circle just confused me. If I tell the truth, I'm afraid I'll make you sad; if I don't tell the truth, I'll feel guilty.
But what I find most interesting is not the sour greeting, but the time of the release of this big news - 521 Don't worry, Uncle Jian is a rational person and he won't say anything like "How can you send such terrible news on such a loving day?"
What I want to emphasize is that releasing this news the day before May 22nd is really meaningful!
If the most severe punishment is killing someone, then 522 is the “heart” of Bitcoin.
If the consensus of Bitcoin has a starting point, then 522 is that starting point.
Why?
The story begins on a noon 11 years ago, when Laszlo Hanyecz, a programmer living in Florida, USA, posted on a Bitcoin forum:
“I want to use 10,000 bitcoins to buy 2 pizzas. Who is willing to take the order?” You know, the treatment of Bitcoin was not as good as it is now, let alone exchanging it for pizza. Few people even heard of it. The post was idle for a long time after it was posted. It was not until 6 pm that someone started asking for the address. After a few words, it seemed that the order was about to be completed, but the other party actually cancelled it.
The post was up for more than four days, until around 7pm on May 22, when Laszlo excitedly announced:
“I successfully bought 2 pizzas with 10,000 bitcoins. It was a huge profit! Pictures speak louder than words!” From the photo, you can really feel the excitement of this guy and his family celebrating. But if you put the current price of Bitcoin together with this photo, it seems that there is a hint of embarrassment in his smile, right? ? ? But then again, Bitcoin is what it is today thanks to this guy. You have to know that there were no exchanges or wallets at the time, and no one believed that this thing could be exchanged with things in the real world, and no one had a price for it.
So May 22nd is a special day. On this day, Bitcoin evolved from "happy beans" into currency and interacted with the real world.
It was also on this day that Bitcoin was traded at $0.004 per coin for the first time. It was also on this day that people began to plant the consensus that "Bitcoin has value."
This time, let’s think carefully about the release date of the news of “cracking down on Bitcoin mining”. Isn’t it quite ironic? I guess if there was a time machine, some powerful force would definitely want to send this message to 521, 11 years ago, and then seal Bitcoin in Pandora's box forever.
But the interesting thing about life is that there are no ifs, no regrets, and no time machine. The Pandora's box has been opened, and Bitcoin has brought out value, along with it, energy consumption.
It is said that Bitcoin is an electricity guzzler, so how much electricity does Bitcoin mining consume?
According to data from the Center for Alternative Finance Research at the University of Cambridge, as of May 17, 2021, the annual electricity consumption of global Bitcoin "mining" is approximately 134.89 billion kilowatt-hours.
If Bitcoin is regarded as a "country", it ranks 27th in the world in terms of electricity consumption, exceeding that of Sweden.
In addition, some scientists predict that by 2024, the energy consumption of the Bitcoin system is expected to account for 96% of the UK's national energy consumption, which will exceed major countries in the world such as Saudi Arabia, Italy, Mexico, and Spain. The question is, why does Bitcoin mining consume so much electricity? How does mining work?
In order to explain these issues clearly, I have to do some popular science. Originally, I wanted to start with the history of currency, but after thinking about it, I decided not to. A search on the Internet will yield a lot of professional popular science articles, such as Byzantine, P2P, hash algorithm, timestamp... Any term can discourage people.
But in fact, the principle of mining is very simple. Suppose I have 21 banknotes with a face value of 100, and each banknote has a unique number. Now, please guess the last digit of the number of the 6th banknote from the left in my hand, and type the number you guessed on the barrage. Whoever guesses it the fastest, I will give the money to him.
If you participated in this game, you actually participated in "mining". The process of using your brain to guess random numbers and get rewards is called "mining". Your brain is equivalent to a "mining machine", and the speed at which you guess random numbers is equivalent to "computing power".
Here, the mechanism of whoever calculates faster gets more rewards is called "PoW Proof of Work". If you guess by yourself, it is called "individual mining". If you gather a group of people in a room to guess with you, then this room is called a "mine".
The only difference in the process of Bitcoin mining is that it does not rely on human brains to calculate, but requires high-performance brains like Peking University's Wei Shen! In the mining circle, this is called a professional chip mining machine, which looks like this:
Therefore, the core of Bitcoin mining is equipment. Whoever has a better mining machine and mines more can get more Bitcoin rewards.
So why does Bitcoin mining consume so much electricity?
The reason is very simple. Unlike other electrical equipment, mining machines can run almost 24 hours a day, all year round as long as there is no power outage or malfunction.
Let's assume that a mining machine consumes 2 kWh of electricity per hour. Under normal circumstances, a mining machine consumes 2*24*30=1440 kWh of electricity per month. A normal household consumes 200-400 kWh of electricity per month, so a mining machine is equivalent to half a year's household electricity consumption, not to mention a mining farm with tens of thousands of mining machines?
In addition to the power consumption of the mining machines themselves, the mining machines in the mine are densely stacked. In addition to consuming power, they also dissipate a lot of heat. This means that the mine must be equipped with large fans for ventilation and heat dissipation. An ordinary three-way large fan has a power of about 1000 watts to 2000 watts. Assuming there is one fan on each of the four corners of the mine, the power is about 4000-8000 watts. Of course, in addition to cooling equipment, the power consumption of some network equipment and monitoring equipment must also be taken into account. So, taken together, the power consumption of Bitcoin mining is very large.
Now that we have covered the science, let’s talk about the impact this policy may have on the cryptocurrency world.
1. Coins that use proof of work may face elimination or transformation. As mentioned earlier, Bitcoin mining uses the POW proof of work mechanism, which means that whoever sweats more will get more benefits. Such rules make it an obstacle to carbon emissions, which is an agreement of almost all countries in the world.
Satoshi Nakamoto was not aware of this big picture when he set up Bitcoin in 2009, so it is very likely that in the world of cryptocurrency, currencies that use proof of work are facing the fate of being eliminated or transformed.
The consensus mechanism in the cryptocurrency world is not only proof of work, but also proof of stake represented by Ethereum 2.0, proof of share authorization represented by EOS, proof of capacity of Filecoin, etc. The market share squeezed out by proof of work will be filled by other consensus mechanisms.
2. The reduction in mining difficulty may lead to selling pressure. Now let’s talk about the possible impact on the price of Bitcoin. According to data from the data tracking website BTC.com, the difficulty of Bitcoin mining dropped by 15.97% on May 30, compared with the historical high on May 13, the largest drop in difficulty this year. If specific rectification policies regarding mining farms are implemented in the future, the estimated computing power will continue to decrease, which means that the difficulty of mining will continue to decrease. Then, under the condition that the annual output of Bitcoin is fixed, the difficulty of mining will decrease, and miners will be able to mine more coins with the same electricity cost, which will inevitably bring about a wave of selling pressure.
Many people say that the main purpose of this regulation is not to crack down on Bitcoin, but the impetuous market of altcoins that have been flying around recently. However, due to the difficulty of regulation, they have to catch the thief first and crack down on Bitcoin mining and trading.
But did this king "deserve to die" or was he "wrongly killed"? |
