2021-04-25
Mining did have many different purposes. But one of the main purposes is to gain community via a profit-sharing mechanism. In the modern business world, we see a lot of businesses trying to build the community by profit sharing. This is known as the sharing economy. By building up the community, directly there is a benefit of the business and indirectly there is a promotion effect. So does in the cryptocurrency world. Initial there is Bitcoin and there are a lot of individual miners. When the difficulty is increasing, it becomes not profitable by using CPU and GPU mining. Then we see Litecoin is trying to address it but fail. Then we have Monero, it is defective to ASIC mining and trying to protect individual miner. However, it is not possible to compete with corporate miners. Corporate miners are moving the place with less electricity cost and could optimize the cooling system to reduce power consumption. Individual miners are hardly profitable. Now, Chia is a new cryptocurrency using proof of space and time. A lot of individual miners are joining the mining community. They don't have to worry about electricity prices. They foresee they could make a profit. Chia claims they are environment friendly. Miners do not care about it at all. Clearly wasting hard drives does not seems to be environmentally friendly. We can see most successful cryptocurrency is backed by miners. Or they have to compromise some properties of cryptocurrency which become a sort of traditional financial product.