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It was probably Satoshis biggest failing. If you read his white paper and early forum posts, the sole intention of mining was to engage a community of normal home PC users to take part in securing Bitcoin and therefore have a vested interest in contributing to the project.
Unfortunately, he didn't take into account the scale of the desire that humans have to make profit on an industrial scale and he also disregarded the warnings from Moore's Law.
The progression from CPU mining to GPU was bad enough (100w to 450w of power per miner) but it's a puzzle why nobody involved in the theoretical side of planning bitcoin considered that fgpa and asics would be developed.
Bitcoin itself uses a difficulty adjustment mechanism which means that at periodic intervals the difficulty of mining is adjusted to ensure that coins are mined at a roughly smooth emission rate. I.e if you have a fucking huge mining farm you get a few weeks where you mine a lot of coins and then the network corrects itself to slow down production. This basically means that the mining arms race isn't about mining coins faster, it's about competing with other miners for market share.
Perversely, instead of nurturing distributed hobbyist security for the network, PoW has lead to a situation where 2/3rds of the bitcoin mining hash rate is located within a few miles of the three gorges dam. Most articles about the environmental impact of Bitcoin seem to skip the fact that's he vast majority of power used is from renewable sources, partly due to state subsidy of green power costs in China. I'm not saying this is a huge improvement, indeed there is one farm in Georgia that is hooked to an oil fired power station and reportedly emits hundreds of kilos of Co2 for each bitcoin miner, but the situation isn't quite as desperate as many journalists report.
Consensus mechanisms are tricky. It's the kind of subject that has entertained cryptographers and mathematicians for centuries. See Byzantine General problem.
PoW was ground breaking, PoS is a huge step forward for the projects that use it. IBM have been doing some really cool work with something called Proof of Time Elapsed which is energy efficient and could be huge.
My project is working in a concept we refer to as "the third way" or "Proof of Consensus". The goal is to secure a blockchain in a cryptographically secure and therefore extremely low power consumption way. Too early to get excited though, we're only just working through the proof of concepts now. We think it is awesome, but there is a long way to go before we prove whether it is or not.
Stonehedge-
but the situation isn't quite as desperate as many journalists report.
I disagree on this.
The volume of energy consumption on a global scale is still a very real concern, particularly while significant portions of most developed nation's energy is derived from non-renewable sources. It's an additional load that we weren't bearing through our combined systems. Environmental impacts simply don't observe boundaries.
Claiming that the Bitcoin mining powered through the Three Gorges Dam power supply is clean is all well and good. However this ignores the important knock on effect that this has. Yes, power is generally localised in supply and usage. However, it is also generally networked across grid structure systems. Therefore, all of that power used for cryptocurrency mining is then no longer available to be used by other customers who are peripheral to the TGD power generation position and thus have to be powered by other power generation sources. Even if those sources are themselves renewable, the ongoing chain effects are at some point going to lead to power demands that aren't supplied by renewable sources.
Claiming all is good for this bit of cryptocurrency because its powered by renewable effectively castigates the customers of adjacent non-renewable energy sources such as the simple householder wanting to heat their home because its winter. What do they get out of it? Basically nothing but a kicking.
Now if we take a look at those currently most vulnerable to climate change, those living in under-developed nations without the capital standing to invest in environmental defence mechanisms (against things like rising sea-levels and desertification, the ensuing civil and militarised unrest caused by scarcity of resources, etc), where do they factor in the cryptocurrency environment? Not at all. The vast majority of the global population that is going to suffer from climate change first operates in a cash economy and they remain largely dependent on foreign aid which is funded through taxation. Taxation that itself is diminished through the rising use of cryptocurrency on that limited volume of its use in transactions.
Are there any cyrptocurrencies that are, in some form, putting back into the communities they are taking from? Because, environmentally, this has become an absolute shitshow.
The_Seldom_Killer
If that were achieved, how much would that reduce the overall average per unit energy cost of any given cryptocurrency?
This is one of those things that I find fascinating and horrifying in equal measure. Unlike the majority of currency formulation, where resource capital could be highly variable, cryptocurrency was far more predictable. At the advent of Bitcoin, did anybody actually bother to look into the projected environmental impact?