It's no longer news today that cryptocurrency mining operations are becoming more monopolised by a few large mining giants as a result the proces is becoming more centralised by the day. It’s becoming increasingly difficult for smaller miners to compete with these big players. The largest mining operations in the world is currently run by the world’s largest mining hardware, Bitman, who not only provide the hardware but also operate large mining farms with thousands of machines. This is becoming a problem for most cryptocurrency that require mining as most of the network hashrate is becoming concentrated in the hands of a single entity. The security of the network as well depends on this entity being honourable and the more centralised they become the easier it is for governments to interfere which could lead to shutdown. There is also the vulnerability to attack, such as the classic 51% attack that experts have been warning about continually.
Energy And Environmental effects
There is also the problem of rising energy cost and environmental implications of mining activities. Mining operations of these coins such as Bitcoin, Litecoin, and Dash are consuming a large percentage of the total world’s energy. These mining machines require 24 hours constant supply of energy and most of the electricity comes from burning of fossil fuel which results in Carbon emission and it’s a major contributor of climate change. Most of these mining operations are concentrated in countries with low cost of electricity and are less authoritarian when it comes to cryptocurrency mining.
Profit Decline
Currently, mining operations are becoming increasingly difficult and less profitable to miners. As more miners join the operation, it’s getting harder to solve the problem because of competitiveness of the process. Before now a personal computer was all it took to mine Bitcoin but currently you have to own ASIC mining hardware. Because of heavy competition, miners have to group together to combine their mining power in order for them to compete effectively. In so doing, once a block is won the reward is shared among the different miners that make up the pool depending on everyone’s contributing power. This way everybody gets a share of Bitcoin. The problem is that with Bitcoin reward being halved after every 210,000 blocks, today the block reward is at 12.5 Bitcoin and the next halve will happen in 2020. Plus the cost of electricity, since these machines consumes much energy and require 24 hours constant supply for powering up and cooling down the equipments. These are serious problems as far as proof of work mining is concerned and the process is becoming more difficult and less profitable as the year goes.
ZeCash Solution
While Bitcoin and other cryptocurrencies are still trying to get their act together and solve these problems, a new cryptocurrency ZeCash is pioneering a new way of cryptocurrency mining that will be based on the proof of stake consensus instead of the proof of work that coins like Bitcoin operate in and in so doing solve the long standing cryptocurrency problems. What this means is instead of running energy intensive mining computers or owning mining farms, anyone can buy and hold units of ZeCash in their wallet and earn a reward for doing so. This type of cryptocurrency mining is preferable to Bitcoin's style of mining because it requires less energy, a miner only has to have his or her personal computer or smartphone that has the ZeCash wallet switched on. This in turn saves miners cost and at the same saves the environment from the implications of burning fossil fuel for energy generation.
ZeCash is opening a great opportunity for both big and small cryptocurrency traders to earn additional interest in their holdings instead of only a small percentage of miners taking the whole reward.
Official ZeCash ICO Links
Website: https://ze.cash/
Whitepaper: https://ze.cash/assets/docs/Zecash_Whitepaper.pdf
ANN Thread: https://bitcointalk.org/index.php?topic=3229718.0
Telegram:https://t.me/ZeCash
My Bitcointalk Profile https://bitcointalk.org/index.php?action=profile;u=2171173