An unresolved problem is enhancing the dependability and quality of human connectivity, and Starlink can resolve that, which will improve decentralisation by changing bitcoin mining.
How Mining Decentralization Can Be Incentivized
Since the Chinese Communist Party’s attack on bitcoin mining more than a year ago, the network has seen a network-wide hash rate fall of more than 60%. This is when the great bitcoin mining migration started. Following China’s mining restriction, more hash power that was formerly located in mainland China was absorbed by the United States. The hash rate increased once more and hit record levels. Regarding Bitcoin’s resilience, there are no issues. One would wonder, though, what can be done to promote network and mining decentralisation in order to lessen the impact of similar attacks on Bitcoin.
Lack Of Internet Access Is A Hindrance In Remote Locations
Despite the fact that mining happens all over the world, miners tend to cluster in areas with low energy costs. Energy, as Nic Carter explained, is a regional phenomenon. Sites for highly concentrated energy production are frequently found in rural settings; Sichuan, China, and Quebec, Canada, are two excellent examples. Since energy is not a readily transportable good, the built hydro capacity exceeds the demand for electricity in this situation, leaving producers with extra capacity to either find alternate consumers or assume wasted energy from their operations. In essence, this is the reason wasted energy is platonic love among miners. Bitcoin miners may act as buyers of last resort in the form of a jurisdiction-neutral bidder to monetize stranded energy.
Even though the topic may seem empowering, in reality, seeking to tap into low-cost, energy-rich sites frequently necessitates running large-scale mining operations. When discussing isolated locations, internet connectivity can also be a problem. Accessing a business internet satellite service won’t be much of a problem for a mining farm worth millions of dollars because their earnings would make such connectivity expenditures appear low on their income statements. On the other hand, this eliminates the possibility that the average Joe lives close to stranded energy locations.
How Starlink Would Enable Remote Bitcoin Mining
60% of people worldwide are now directly connected to the internet. According to this, fewer than 3 billion people are currently “unconnected” to the internet, with the majority of them living in southern and eastern Asia as well as Africa.
Another unresolved problem is enhancing the dependability and quality of human connectivity. Enter Starlink. Starlink, an initiative led by SpaceX, aims to deliver high-speed, low-latency broadband internet in remote and rural areas all over the world. Their goal is to deploy the most cutting-edge broadband internet system in the world by utilising SpaceX’s expertise in developing rockets and spacecraft.
A Starlink access point typically costs $600 in hardware and $3,000 per month to run. Even while the cost can be viewed as excessive for the typical person, speculating on how this might affect Bitcoin yields some intriguing thoughts.
How Bitcoin Mining In Remote Locations Could Accelerate Hyperbitcoinization
Given that there is already a bitcoin miner in the Netherlands that powers greenhouses, the idea of miners paying Starlink prices in remote areas in order to access stranded energy while providing internet connectivity may not be that far off. The same may apply to offering internet-based services in unconnected locations in exchange for newly minted bitcoin if wasted heat generation is subsidised to grow produce and bloom flowers in one location.
It could also be interesting to consider how this might contribute to lessening network centralization among internet service providers (ISPs). 60% of all Bitcoin traffic has passed via just three ISPs for at least the last five years, according to DARPA’s “Are Blockchains Decentralized?” paper (pdf below). In addition, “As of July 2021, about half of all public Bitcoin nodes were operating from IP addresses in German, French, and U.S. ASes, the top four of which are hosting providers (Hetzner, OVH, Digital Ocean, and Amazon AWS).”
On the other hand, community-based strategies to lessen centralization appear to be spreading within the Bitcoin ecosystem. With initiatives like Fedimint aiming to speed up custodial decentralisation and home mining rigs gaining popularity recently, one could wonder:
“Is Starlink well on its way to become one of the enablers for last-mile bitcoin mining and network decentralization?”
It remains to be seen.
Read the paper given below:
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