The Green Cryptocurrency: Sustainable cryptocurrency for better future

Guys in my last post I told you all about basics of cryptocurrency and mining here. Most of you would already have tried a bit of mining for fun or for making money. Mining has become the latest trend in the world and people have established a whole plant for mining and making huge profits. Professional miners target the country where electricity is cheapest and set up huge plants like one shown in the picture to cut down investment cost and increase their profits. This industry has huge returns as it starts giving returns very quickly, that's why it has attracted investors all around the world. 

Problems related to mining

As we all know by now that mining is a very power intensive job.It requires a huge amount of electricity and resources to make it profitable. Also, lots of heat and noise is dissipated from such plants. And the way mining is becoming a trend, the heat issues are also rising to alarming levels. Where at parts of the world there is no electricity, people in other parts are waisting it madly for there own profits. 

In a report, the cryptocurrency website Digiconomics said that worldwide bitcoin mining was using more electricity than Serbia. The country. Writing for Grist, Eric Holthaus calculated that by July 2019, the Bitcoin peer-to-peer network—remember BitTorrent? Like that—would require more electricity than all of the United States. And by November of 2020, it’d use more electricity than the entire world does today.

Solution: Using greener cryptocurrency

Mining was great for investment long ago. But today if you think of mining to make profit then remember that there are huge Mining rigs set up and a common miner stands no chance to make a profit and will spend more resources than it will earn. So, how can a common man invest in this emerging new option? That's where the idea of Proof-of-Importance, proof-of-work, and proof-of-stake all come in.

What is POI?

Proof-of-Importance, proof-of-work, and proof-of-stake all have one thing in common. They are all algorithms, which when applied to cryptocurrency help to maintain the order in which blocks are selected. This becomes important when we start to think of things such as double spending. This is where money is spent more than once (fraudulently). For example, some currencies use verification of each transaction in the blockchain to prevent this.

To understand why the idea of POI is so revolutionary, we first need to understand how POW and POS work.

POW (Proof-of-Work) was the first system to be implemented and is used by cryptocurrencies such as Bitcoin and also Scrypt coins such as Dogecoin.

In order to “earn” these cryptocurrencies, you must use your computer to mine the coin; the greater your machine’s power, the bigger chance you have of earning.

Why did they make it so that making a block was both expensive and time-consuming? As it requires large computational power to make a block, attacks on the blockchain become harder to carry out as the attacker would have to use an unfeasible amount of resources.

Note that very many cryptocurrencies have some sort of blockchain explorer, which allows anyone to see any transactions as well as the mining of blocks.

Blockchain technology can also be used for file sharing and proof of asset ownership, and many other things!

However, it was not long before people realized the obvious problems.

Mining (the process in which computational power is used to make new blocks), has very little use and huge inputs.

As technology gets better, people have to spend more money to get the latest ASICs (machines specifically for mining), meaning, even more energy is wasted.

It is pointless to try mining with a CPU. You are competing against companies with rooms of ASICs, and electricity costs mean it is a waste of time. For example, if you had a decent CPU hash rate of 0.1kH, in one week you would not even make a cent!

This was why the POS (Proof-of-Stake) system was introduced. It was implemented first by the well-known Peercoin cryptocurrency. Instead of conventional mining, it asks participants to prove ownership of their “stake,” or how much Peercoin they possess.

Larger and older sets of coins have a higher probability of signing the next block, and a lot of computing power is saved.

Again, however, there are problems. Richer users are more likely to sign the next block, and the more blocks they obtain, the richer they get. The problem is the same, richer users will gain wealth much faster than others.

This is where PoI comes in, because of the problems that were mentioned above, PoI algorithm came around, the idea behind this algorithm is that you are important as your activity on the network. it means those who are active on the network and help project to benefit(loyal users) are going to be rewarded, each address(user) is given a trust score, and by activities on the network it gets higher, the higher it gets, the more chance you will have to be rewarded by the network, this way rich necessarily does not get richer and everyone has the chance to be rewarded based on loyalty and effort of the user.