Blockchain mining networks are frequently the victims of their own success. The two modern facts that define the mining landscape and cause blockchains to fall short of their promises are as follows: :
- he ongoing technological arms race driven by inherent competitive greed
- the rising energy costs associated with proof-of-work (PoW) mining.
In terms of hash rate, blockchains based on PoW consensus have become excessively uneven and increasingly centralised. This concentration of mining power in fewer and fewer hands is an attack on blockchains’ core demand for dispersion and decentralisation.
Furthermore, the incentive to increase mining capacity has a knock-on impact in terms of escalating energy prices, which have the potential to create irreversible environmental harm, as has been the crux of the Chinese Bitcoin (BTC) mining controversy. To maintain the long-term viability of blockchain and cryptocurrencies, the hash rate must be distributed more evenly, preserving the key components of distribution and decentralisation. This needs a rethinking of the mining process as we know it, as well as a redesign of PoW systems.