Cryptocurrencies are now becoming a staple in this present era. There are crypto tokens that tackle climate challenges, cross-border payments, apps of the future generation, and so much more. However, mining these assets has been shrouded in controversy.
Why is the current condition of new cryptocurrency mining projects detrimental, and what is the way forward? We discuss the answer to these questions and seek out a solution that builds new value proposition on the existing blockchains.
Is there a way to mine crypto without hardcore mining equipment and technical knowledge? Is it possible to transact and earn? Let’s find out.
What Is the Problem with Mining Cryptocurrency?
The first step to answering this question is understanding the underlying framework behind cryptocurrencies.
When Bitcoin was launched in 2009, the digital asset introduced the concept called the proof-of-work (PoW) consensus algorithm. In the simplest of terms, a PoW framework required all connected computers in a network to compete to solve highly complex mathematical puzzles to create new coins in exchange for block rewards.
The merits of this system are impressive: it addresses the issue of double-spend (when an external entity controls more than half of a network’s resources) and is highly secure due to its decentralised format. The trade-off was speed and the energy required to undertake this task.
In addition, the energy heatmap of these PoW protocols has continued to increase as the mining difficulty increases.
According to a Cambridge Bitcoin Electricity Consumption Index (CBECI) release, PoW crypto mining consumes an estimated 10.52 GW/h annually. This is more than the annual energy usage of small European countries like Slovakia, the Netherlands, and the Czech Republic.
While many new generation blockchain protocols are pivoting to a more eco-friendly option called proof-of-stake (PoS), PoW still commands the highest impact in the crypto industry due to the dominance of crypto giants Bitcoin.
Another critical issue about crypto mining is the tools required to generate new coins.
Crypto mining is highly capital-intensive as miners need to acquire industry-specific rigs or hardware to verify and add transactions to the blockchain. These rigs are often costly and are easily outdated due to the growing difficulty level. The most popular hardware miner is the fleet from Bitmain, a PoW mining equipment miner famous for its Antminer S series. Each mining equipment costs well above $5,000 for the most recent ones.
The significant capital outlay prevents retail miners from joining the exercise as most companies join specialised mining pools to gain block rewards. And mining pools charge a pool fee for using their service, further inflating miners’ overall costs.
How Much Energy Does It Cost to Create a Bitcoin?
Mining companies have tried to reduce the carbon signature of Bitcoin; however, this has not been entirely successful. According to Digiconomomist’s Bitcoin Energy Consumption Index, a single Bitcoin transaction gulps as much as 1,509.92 kW/h. It would take roughly 51.75 days for an average US household to consume this energy.
Over 842 kilograms of CO2 worth of carbon footprint is released in mining a new Bitcoin. This equates to roughly 1.8 million-plus worth of VISA transactions or about 140,363 hours of binge-watching YouTube videos.
What Can Be Done About Crypto’s Energy Problem?
Several measures are being employed to cut down on the high energy demands of Bitcoin mining while making it environmentally friendly. Here are some of them:
Migration to PoS Systems
PoW protocols like Ethereum are currently transitioning to a PoS system. This is expected to increase its transaction speed and reduce its fee. But most importantly, PoS systems are more energy conservative and require less energy to operate. According to the smart contract network, the PoS algorithm would enable Ethereum to reduce its energy consumption by 99.95%, making it less environmentally harmful.
Use of Renewable Energy
Several Bitcoin miners are already exploring renewable energy to reduce its carbon footprint. According to a Q4 2021 survey by the Bitcoin Mining Council, about 58.5% of Bitcoin is mined using renewable energy. The goal is for all cryptocurrency mining to be powered by sustainable energy.
Introduce Carbon Credits or Fees
Another novel strategy used by Bitcoin mining firms is carbon credits. By acquiring carbon credits from carbon companies, users of this technique can offset their energy consumption.
But what if there was a more effective approach? A way for users to create new tokens without using up truckloads of energy, buying expensive hardware miners, or ever needing to worry about mining difficulty?
How MBASE Can Help to Solve the Environmental Footprint Caused by the Crypto Mining
In response to recurrent problems in the crypto industry, the Minebase team was established to provide consumers with an alternative method for producing new tokens without endangering the environment. These new tokens can be used as a form of payment, store of value and staking, which is a process of generating yield on the tokens you already hold.
Essentially, the protocol enables users to mine tokens with transaction fees using the top 20 decentralised exchanges (DEXs), Etherscan and Bitcoin networks. The CTP concept, also known as Creative Token Production, is used to accomplish this.
The basis of CTP is the concept of mining tokens, which is accomplished by collecting fees from the aforementioned platforms and converting them into its MBASE token once it hits a certain price level. Compared to Bitcoin, you don’t need any hardware to create MBASE.
The token is created form fees generated by already existing blockchains, which most importantly decreases the consumption footprint of crypto industry as a whole.
This idea demystifies the concept of crypto mining and opens the floor for various interested parties to mine digital assets.
Anyone can mine the MBASE token through CTP using their PC or smartphone. All that needs to be done is to create an account and a wallet address. All fees paid while executing trades on Bitcoin, Etherscan, and DEX platforms are deposited in the wallet address and can then be used to create the MBASE token.
The current price threshold for mining an MBASE token is set at $6.50, meaning that when the accrued fees reach this stated price, users can create an MBASE token. Our sources also state that the token is set to be listed on most established exchanges as early as September 2022, which means that everyone will soon have access to the new way of transacting and earning at the same time.
What are the possible features and advantages of the Minebase token(MBASE)?
- Cuts across multiple blockchain networks, like Bitcoin, Ethereum, UniSwap, and SushiSwap.
- Mining MBASE does not harm the environment, as it only harnesses the energy already expended.
- CTP only interacts with decentralised networks, meaning users’ transactions are not recorded on a centralised platform.
- Available and easy to use by anyone with a smartphone or PC.
- More reach as everyday individuals can now participate in the decentralised economy.
Conclusion: Environment & Blockchain of the Future
Despite its current energy challenges, the blockchain industry has much potential for the future.
Experts in the industry are optimistic since more companies can automate their business practices using smart contracts. The ripple effect would result in reduced reliance on human labour to advance the business and a reduction in carbon emissions from transportation.
While the industry is still in its infancy, protocols like Minebase can propel the market into its next phase.