CRYPTO-MINING: Challenges and possible solutions.
By Victor Denia on ALTCOIN MAGAZINE
A could-be watchtower for future miners
What is crytpocurrency mining?
People might have heard of GOLD mining and the profits it generated over the millennia and yet another kind of mining has emerged in the market — cryptocurrency mining. Yet it is not just a way of making money. Miners have an important role in the blockchain.
To explain it with ease, cryptocurrency mining is a process by which transactions from various cryptocurrency are verified and added to the blockchain digital ledger. As with gold, any cryptocurrency has limited supply that comes with its valuable price, all worthy to be mined digitally. Mining, as it is called, plays an important role in the blockchain as miners are responsible for the authenticity of the information made in the transactions and for the update in the blockchain therefore adding security to the system. Miners save blockchains from block frauds and hacker attacks that will contribute much to the networks’ decentralization.
The clash of POW and POS
The two most common blockchain consensus mechanism are Proof-of-Work (POW) and Proof-of-Stake (POS)systems. While Proof-of-Work (POW) stands tall of its record of adoption and security, its high-energy cost and increasing centralization of mining operations will also stand as its biggest downfall in the future. The more coins are being mined, the harder the puzzle becomes for future miners thus a more complicated and higher mining output machine is needed. In the long run, only the rich people or institutions will have the opportunity to mine these cryptocurrencies making it not profitable for the poor people. Honestly, this is not what blockchain stands for. This condition is becoming inevitable as some global miners are forced to throw away their mining equipment for lack of profitability. Could this be the end?
Meanwhile, Proof-of-Stake as consensus mechanism has been becoming famous recently, due to its higher scalability and higher throughput thus becoming an option for the overburdened POW miners. The only thing is, you need to buy a number of coins and stake it for a period of time. So if you have no money, you can’t hoard lots of it and earn more just by staking. In the end, rewards get smaller as more miners engage in mining.
Have you seen the pattern? Obviously, under these two consensus mechanisms, it is very clear that the RICH has more advantage over the POOR. And it is the same for every country who has plans of adopting these systems. If money is a guarantee for profit over these so-called cryptocurrencies, blockchain’s decentralized characteristic has lost its savor.
Sooner or later, people might began to realize that cryptocurrency mining is “not” for everyone. This could result in lesser adoption and thus the downfall of all cryptocurrency including BITCOIN.
What if there is another consensus mechanism that allows anyone and everyone to be a miner without the need of spending too much for the equipment and for the stake itself?
An introduction to a NEW CONSENSUS MECHANISM
A new coin has come into the limelight — TAUcoin. Tau proposes an experimental Proof-of-Transaction as consensus mechanism. Under this mechanism, verifiers (miners) will be competing on accumulating transactions to generate new blocks and acquire the transaction fees. Block size were reduced to 1000x the normal. Sounds crazy but yes, it is an experiment worth the time. Founders never did an ICO and decided to distribute TAUcoins via airdrop and bounties.
Imagine that!!!
Taucoin’s top priority is to create a perfect cryptocurrency that anyone can use without censorship, inflation or high cost. With a relatively low block size, it will allow all mobile users to mine successfully. Comes with that is the strength of its blockchain for as long as transactions are building up.
How do I start? Visit taucoin’s webpage and log in through facebook or google, whichever is available to you. If you think it has what it takes to make a cryptocurrency that is available for everyone, join in the fun and excitement.
Conclusion: Mining is effective in the security of the blockchain but if it requires a lot of money and energy to put up and is not profitable in the long run, why would an ordinary individual pursue it? And if TAUcoin is offering almost the same service as other cryptocurrency in the market has, with mobile mining that is so convenient to anybody, then it would be time-worthy to engage oneself in this project.
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The purpose of ALTCOIN MAGAZINE is to educate the world on crypto and to bring it to the hands and the minds of the masses. This article was written and composed by Mohammad Musharraf on ALTCOIN MAGAZINE.
