Why is mining such a good way of securing a blockchain?
As stated earlier, mining requires larges amount of computing power, which is not accessible to everyone.
Without going in too many details, someone who would own 51% of the miners in a blockchain would basically decide of the state of the network at any time, meaning they could do whatever they want (execute transactions without user approval for example).
This is known as a “51% attack”.
Executing a 51% attack on a network like Bitcoin would mean having enough money to buy the needed computing power, buying all the components, setting up the infrastructure… Which is far too much of a hassle to be worth it!
What are the issues with mining?
We’ll accept Moore’s law as valid, which states that the number of transistors on a microchip doubles approximately every two years, leading to exponential growth in computing power and efficiency.
Waste
As mining gets harder, better computers get produced, meaning miners have to change their gear every so often, leading to waste, and over-consumption (and we don’t want that).
Shortages
Mining is a very profitable industry, but only if done at a large scale, which means small groups need to buy tons of computer parts in order to build profitable mining farms.
This phenomenon can lead to shortages of computer parts, as we’ve seen it in 2021 with Nvidia.
Electric consumption
As stated, blockchains rely on complex, high load computations. These are usually executed by graphics cards (GPU) — as they can execute a lot of parallel tasks, compared to CPUs — or ASIC cards, which are specialized pieces of hardware, made to be the most efficient on a special type of operation.
Either way, these tools require a huge amount of electricity to work.
Some blockchains implement different proof-of-work algorithms that consume less energy, leading to more sustainable and scalable technologies, like BSV (Bitcoin Satoshi Vision).
