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I'm William, a blockchain researcher. Ask me about bitcoin mining!

Time : 25/12/2021 Author : 6k9e3p Click : + -
        I would like to ask you a very simple question. What is the relationship between electricity and mining? Isn't bitcoin mining a computer operation? Why is it related to energy consumption? I'm in a fog. Since 2017, with the rising price of cryptocurrency, a large number of people have poured into the crypto digital mining industry. The "mining" of cryptocurrency, in short, is the process of carrying out mathematical operations for the blockchain network through computer nodes and carrying out bookkeeping competition; The people who run these computer nodes are "miners"; These computing nodes are "mining machines". In the mining process, the miners mainly have two major tasks: first, put the monitored new transactions into the new block, and conduct hash operation to find an effective random number, so that the block becomes a legal block; The second is to receive and verify the block.
        When the block passes the verification and is included in the public main chain, the miners who find the new block will receive cryptocurrency rewards. It should be noted that the mining industry is unique to cryptocurrency based on POW mechanism, while POS mechanism and dpos mechanism are equivalent to virtual mining and do not require professional mining machines. The operation of these mining machines is supported by electric energy. This is inseparable from the profound changes in the global macroeconomic situation in 2020. In 2020, we experienced Black Swan events such as "pandemic" and "negative oil price" that have not been seen in a century. In order to cope with the economic recession caused by the epidemic, countries adopted quarterly loose monetary policies.
        On the one hand, affected by the epidemic, the global economic recovery will slow down in the coming year; On the other hand, the central bank's ultra loose monetary policy pushed up inflation expectations in the financial market. In the economic environment of high inflation and low growth, in order to avoid the damage of nominal principal and to pursue higher returns, investors' demand for hoarding cash naturally evolved into the demand for gold and bitcoin, thus driving the bull market of bitcoin. The electric energy used in several mining areas in China is different. Thermal power is mainly used in Inner Mongolia and hydropower is mainly used in Southwest China. The policy of limiting energy consumption depends on the specific situation of each region. In fact, bitcoin mining is beneficial to the economic development of some southwest regions and is also popular with local governments.
        First, bitcoin mining only consumes energy, but does not emit pollutants, which is green and environmentally friendly; Secondly, the hydropower in Southwest China is abundant, especially in the wet season, the power is not fully utilized, and bitcoin mining can solve this problem; Finally, the mining industry provides a large number of taxes and jobs for local governments.
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