Bitcoin mining has come a long way since Welsh IT contractors could mine (and then lose) ₿7,500 on their laptops. The practice of Bitcoin mining has inspired a global multi-billion dollar industry attracting some of technology’s top names, but what changes can we expect in the Bitcoin mining industry over the next decade? We look at the trends that are likely to shape Bitcoin mining between now and 2030.
Bitcoin mining been a China-dominated enterprise for many years, but the past few years have seen a shift in this geographic dominance. While China still has a 60% monopoly on Bitcoin mining, the methods they use are the same that they have been using for many years. In contrast, other facilities, such as Layer1’s base in Texas and RMC’s operation in a former aluminum plant in Russia, have taken a more forward-thinking approach to their operations, and as such are more ‘futureproof’ than the Chinese miners – Layer1 CEO Alexander Liegl has said that the 2020 Bitcoin halving will act as the “death knell” to many old school Chinese mining operations.
Unless China rapidly alters their approach to mining, we will see a reduction in their dominance of Bitcoin mining throughout the decade, with big players such as the US taking back a slice of what they used to own.
Powerful, Energy-efficient Mining Equipment
Bitcoin mining equipment is getting more and more powerful with every iteration, and this will only continue in the next decade. ASIC chips, the brains and brawn of each individual miner, are forever being updated, and with tech giants such as Samsung and Intel getting into the ASIC chip-making business within the last two years, there is the possibility that an adaptation to the existing chips, or an entirely new technology such as optical proof-of work, will blow the competition out of the water.
Along with increased power is an emerging trend to reduce the famous energy demands of Bitcoin mining, which we have seen with recent chip launches. By the end of the decade we can expect to see ASIC chips that offer drastically improved power compared to today’s chips with only a slightly increased energy demand.
Renewable Energy Sources
By 2030, the days of massive Chinese warehouses sucking up megawatts of local electricity supplies will almost be a thing of the past. The world is turning to renewable energy sources, and Bitcoin is no different – already we have seen new Bitcoin mining farms set up to use wind and hydroelectric power, and this trend will only continue throughout the 2020s.
These newer farms are cheaper to run and can therefore spend more on mining equipment, allowing them a greater share of the hashrate. The new Layer1 mining site in Texas uses liquid cooling technology, while sites in Iceland use the naturally cold atmosphere to reduce the artificial cooling requirements.
The 2020s may also usher in other technologies that are right now just ideas on university whiteboards, meaning that by 2030 the vast majority of Bitcoin mining will be done using renewable energy sources.
Bitcoin is, wrongly or rightly, regularly berated for its impact on the environment, and while the above measures will help reduce Bitcoin’s energy demands, they won’t necessarily have as big an impact on the CO2 that is produced by its operations.
The increasing awareness of the impact of climate change around the world has ushered in a stampede towards one particular type of technology that could have the biggest impact of all – carbon capture. Carbon capture and utilization (CCU) could be an estimated $1 trillion market by 2030, and Bitcoin mining would benefit hugely from this, especially if there were a way to turn it back into a form that miners could use.
At the start of this decade there are, unsurprisingly, more carbon capture projects being tested around the world than at any other time, and there is the chance that by 2030 one or more of these projects will have been turned into practical applications that some of the bigger mining firms are ready to employ.
Quantum computing is a thorny issue for Bitcoin supporters, which we covered in more detail in January 2019. Some say it will break the Bitcoin blockchain and have a damaging effect on mining while others say the Bitcoin blockchain will be secured long before quantum computing becomes a viable entity.
With so much still unknown about the practice, we really can’t say in what state quantum computing will be by 2030, although it is likely there will be some working prototypes around. However, these will be used first and foremost for military purposes, so even if they do exist in the wild no one is going to spend the amount of money needed to buy one just to see if they can mine Bitcoin with it.
Bitcoin Mining’s Bright Future
With some knowns and some unknowns regarding Bitcoin mining over the next ten years, it will be fascinating to see how miners use improving technology and environmental to gain an edge and improve their hashrates. Will we see Bitcoin mining in the Arctic, or a new ASIC chip that doubles the power of mining equipment overnight?
We simply don’t know, but with more and more money being spent on it every year, at least we know one thing – Bitcoin mining isn’t going anywhere.