The Future of Cryptocurrency Mining – Opinion

Opinion | June 29, 2018 By:

Crypto mining is known for taking up massive amounts of space, energy and money to attain the most desirable coins in the market. Many computing rigs are located in sprawling data centers in locales with low temperatures and cheap electricity. As mining becomes both more difficult and lucrative, how will the practice evolve to remain sustainable in the future?

The future of crypto mining has a clear trajectory for the next several years, but beyond that, the outlook becomes hazier. Could Rigs be replaced by smaller machines, perhaps even smartphones as some have suggested? It’s clear that crypto mining will one day move beyond the current Rigs, but there are significant hurdles to overcome first. Not only will the Rigs need to evolve, but so will their management.

For example, a mining company faces two main questions in deciding where to locate its data center(s)

  1. Which areas have the optimal trifecta of cheap electricity, low temperatures and high-speed internet?
  2. How do you ensure you’re not spreading resources too thin by maintaining data centers in far-flung locations far away from each other?

Geographical spread is a lynchpin for mining companies, because having too many Rigs in a single location can create a crisis if a data center fails to deliver electricity or Internet at one point (and yes, it will happen). Every second that a Rig is not working, it’s losing money. Future mining machines will need to calibrate for that and create workarounds for this problem.

Smartphones the Answer?

Some have posited that the natural progression for crypto mining would be to move to the smartphone. Though this is being done on a small scale already (such as through MinerGate,) it has several challenges overall. First, smartphones simply lack the fundamental computing power needed to mine. To remain competitive, it requires the accumulation of thousands of smartphones at one time and would create a logistical nightmare. In addition to that, there are issues with overheating (Rigs are currently the size they are in order to handle the power needed to mine.) Then there are the cybersecurity implications of mining at the tip of your fingertips: the convenience of the smartphone also makes it infinitely hackable, which in turn means  miners stand to lose a lot if they are ever hacked. The hurdles to mining via smartphone are many, not the least of which is how would smartphones handle the massive amount of data consumption. In fact, Apple recently changed iOS guidelines to ban crypto mining just in case it could actually be done on their devices in the future.

The simple answer is that while smartphones at first seem like an attractive option because of their small size and convenience, they are not advanced enough to handle what mining currently requires.

Artificial Intelligence

Though smartphones may not be the future, AI could help shape what it becomes. AI has transformed countless other industries to become faster, more efficient, and more intuitive than before. It has the capacity to provide a higher level of performance than current Rigs at a much faster rate. Even as mining’s difficulty exceeds, AI may be able to keep up with the accelerated demand and ‘learn’ as it develops to keep up with the pace — something that Rigs now cannot do. Quantum computing, (still in its experimental stages currently) has the capacity to do a large number calculations and can facilitate AI’s algorithms and learning in order to mine faster and more efficiently than ever before. Though it’s still incredibly expensive to use quantum computing for mining, it could become a viability in the future as the technology progresses and evolves.

Additionally, while it feels unlikely today, it is very possible that the efficacy of mining outlasts Bitcoin’s dominance in the market. Artificial Intelligence would be instrumental in deciding which coins are increasing in profitability in real-time and switch computing power to an alternative coin. Currently, people can do this, but it requires significant research, institutional knowledge and guesswork to achieve.

In general, crypto mining must be nimble to remain competitive as blockchain algorithms and new coins shape where miners will focus their attention, as well as reduce the environmental strain that is currently a looming industry-wide issue. While the latter is often exaggerated, cryptocurrency is currently in a battle of perception and it’s a must win. Similar to how Bitcoin and altcoin value was created from a vision and a collective desire for a different form of wealth, that same vision and desire will continue to be tested.