In 2017 when Bitcoins bubble burst everyone thought that the Bitcoins reign was over and this will be the end of the cryptocurrency. But as Bitcoins price pummeled something strange happened even though Bitcoins value dropped the rate at which the bitcoin was created or mined started to rise dramatically. The reason being even though Bitcoins price was low mining it was still very profitable.
But when prices dropped again in 2018 from $6,500 to $3,500, the mining business was halted. This Bitcoin drop put many Bitcoin miners out of business as it was no longer profitable for them to mine it, the price of hardware plus energy to run it was still the same but return was not. The rate of mining collapsed, falling from 60 exa-hashes per second to just 35. This Impact in no way was going to be unnoticed, before mining had been geographically diverse, without giving monopoly to one country or region with this Price drop the mining become profitable onlyfor countries where the energy was cheap this led to Monopoly of western china over the mining business.
The biggest obstacle is that mining business is really expensive and energy consuming, its obviously made like this so that cryptocurrency remains secure. As the interest in bitcoin rose in the mases so did its energy consumption and cost. By some estimates One Bitcoin needs over 66.5 terawatt-hours per year. This is not sustainable, especially if the Bitcoin business keeps on growing like it is currently. So a new method of mining was desperately needed.
The solution came from Micheal Dubrovsky at PoWx, Marshall Ball at Columbia University and Bogdan Penvosky at the University of Paris in the form of Photonic chips. They came up with an idea that was more expansive but much more energy efficient. Instead of using traditional computers to do the numbers they would rely on optical computers. These computers use less energy and can make the Mining business much more efficient. They claim that its is compatible with the current encryption system, but are they right?
Things like these have been done in the past as well like the introduction of application specific integrated circuits (ASIC chips) that were mad only for Bitcoin mining purposes. They claim that the technology can offer 2-3 orders of magnitude better energy efficiency over electronic processors. So Dubrovsky and his associates have come up with a revised encryption protocol, called HeavyHash, that is optimized for Photonic Computers. When the cost of energy is no longer the main problem the cost of hardware will remain the dominant variable.
The problem with this is that power efficiency of photonic chips has yet to be clearly established. Also, this doesn’t resolve the issue associated with regional differences in cost of energy. In future the cost of hardware will most likely be same for all miners, as they are now. So, the best long-term method is still to find cheap source of energy.