Mining can do much more than Bitcoin. Why we need a new understanding of the proof-of-work mechanism in Bitcoin and what new use cases could look like.
Why Do Companies Mine Bitcoin? The answer should be simple: to earn bitcoin by maintaining the bitcoin network. But that could change in the future. More and more voices and theses indicate that bitcoin generation is just the tip of the mining iceberg according to Proof-of-Work. In the future, mining could develop into a key industry that goes far beyond its initial use case – the Bitcoin network.
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Artificial intelligence thanks to mining
The AI revolution, which we are all experiencing first-hand, consumes vast amounts of computing power. Accordingly, it is obvious that the mining hardware is not only used for Bitcoin, but also for AI high-performance computing operations. The BTC Miner Hut 8 and Hive Blockchain have already used their infrastructure for arithmetic operations in the machine learning area.
Of course, some hardware components have to be converted for this, but this effort is relatively easy to implement. Finally, building the right setup with cheap power, adequate cooling, and physical infrastructure is far more challenging.
PoW for Independence
In addition to the economic aspect of running arithmetic operations for AI applications as a Bitcoin miner, there is also the security factor. The decentralization of various computing operations can contribute to a new and necessary level of security.
A globally distributed AI network spanning crypto mining rigs would be significantly more difficult for governments or other parties to control centrally than an AI network located in Amazon and Co. owned server farms, as is currently the case the case is. Not an irrelevant factor for national security in the face of increasing cyber attacks and electronic warfare. This applies not only to AI, but to all forms of data streams.
Bitcoin mining against cyber attacks
US officer Major Jason Lowery came to the same conclusion. At MIT, he recently published his thesis paper Software , which sparked public debate. In this paper, he calls on the Pentagon to use the Bitcoin network as a foundation layer for various infrastructure applications.
This would drive up the cost of cyber attacks. Especially since a focus on Bitcoin mining could lead to global superiority in terms of energy availability. Even if his theses may be very daring and leave many questions, this reveals a new understanding of the use of the proof-of-work mechanism in Bitcoin.
Turbo for the energy transition
One challenge with renewable energies is that, in contrast to coal or nuclear power, they are highly volatile. There are various influencing factors that determine how high the energy yield is: Sometimes the wind blows stronger, sometimes the sun shines less.
In order to enable nationwide coverage with regenerative energies, which also guarantees consumption when the yield is low, you have to install so many wind and solar systems that there is often an overproduction of energy. In order not to overload the grids, buyers for the electricity have to be found.
This is exactly where the energy-intensive bitcoin mining comes into play. Because mining systems can be switched on and off very flexibly, they are able to act as spontaneous buyers for surplus production . With them, the utilization of energy networks could not only be better controlled, but the regenerative energies could become profitable more quickly thanks to the Bitcoin-related cross-financing.
The possibilities go far beyond this application. Be it to use the mining waste heat for heating purposes or to reduce CO2 emissions when burning fossil fuels by processing excess gases. This would be a great opportunity for BTC’s image: from dirty slob to green savior.
Investment case: Higher profitability through variety of applications
The ability to adapt their infrastructure to market conditions is a huge opportunity for the bitcoin mining industry. After all, they would reduce their dependence on the BTC course or the mining difficulty.
The crypto winter has shown how tough it can be for companies when they are only dependent on volatile Bitcoin price events. By making the infrastructure more flexible, miners can not only increase their profitability by investing their computing power where the yield is highest. They would also be able to survive bitcoin dry spells much better. Bitcoin itself would also benefit from this application diversification, since the financing of decentralization would be based on several pillars.
FAQ About Bitcoin
What is a Bitcoin and how does it work?
Bitcoin (BTC) is a cryptocurrency, a virtual currency designed to act as money and a form of payment outside the control of any one person, group, or entity, thus removing the need for third-party involvement in financial transactions.
What is bitcoin mining?
Bitcoin mining is the process by which Bitcoin transactions are validated digitally on the Bitcoin network and added to the blockchain ledger. It is done by solving complex cryptographic hash puzzles to verify blocks of transactions that are updated on the decentralized blockchain ledger.
Bitcoin Price Prediction 2023
Bitcoin, the world’s largest and most valuable cryptocurrency, was launched in 2009 and is traded and stored on a decentralized ledger system called a blockchain. Its market capitalization currently stands at over $540 billion, making it the most dominant player in the crypto market.
As of writing, the price of Bitcoin has been fluctuating, with some experts predicting an average BTC rate of $30,426.87 in December 2023. However, according to CoinDCX, the second half of 2023 is expected to be more bullish, with the price potentially hitting $50,000. But by the end of Q3, the price may reach beyond $32,000 to $35,000 and may surge beyond $40,000 in the final quarter, falling short of the $50,000 mark.Despite its volatility, many investors still believe that Bitcoin is a strong investment option for the coming years. However, there are experts who are now suggesting that another cryptocurrency could offer even greater potential for growth.
Bitcoin Price Prediction 2025
According to our Bitcoin (BTC) price prediction, in 2025, the coin may have minimum and maximum prices of around $56,555.59 and $86,387.11, respectively.
Bitcoin Price Prediction 2030
By the time it is 2030, our Bitcoin prediction suggests that the coin might have reached a maximum value of $159,502.98, with a minimum price of $159,502.98.