Mark our Words: On next food price crisis, the empty proof of work cryptos like bitcoin, litecoin etc. will be the welcome scapegoat.
Bitcoin and other POW cryptocurrencies
As the universe records an ever-increasing yearly population, and the economy, an unprecedented overall increase in its global market capitalization, also, with the recent implementation and adoption( by many nations ) of a cashless policy society and the encouragement of electronic transactions, the primitive use of fiat currencies, ( as at the present ), it appears, is no longer a sufficient method to serve as an efficient medium of exchange.
Bitcoin, beyond every reasonable doubt, is, as it concerns the crypto space, the most valuable cryptocurrency. The value of Bitcoin today, and the adoption of this controversial electronic currency as a possible medium of exchange, has gained it an unprecedented respect among other cryptos. A few other electronic currencies like Litecoin and Ethereum also have gained wide recognition among their contemporaries as a result of adopting the very technologies and technicalities upon which Bitcoin was built, with Bitcoin itself, remaining the "king crypto"! The decentralized transaction ledgers built by these coins in the formation of blocks on the blockchain usually requires a "Proof-Of-Work" consensus system for transactions to be fully accredited and confirmed!
Miners therefore have to solve difficult algorithm-based mathematical puzzles in other to mine these POW currencies! This “mathematical puzzle” has a key feature: asymmetry. The work, in fact, must be moderately hard on the requester side but easy to check for the network. This idea is also known as a CPU cost function, client puzzle, computational puzzle or CPU pricing function.
All the network miners compete to be the first to find a solution for the mathematical problem that concerns the candidate block, a problem that cannot be solved in other ways than through brute force so that essentially requires a huge number of attempts.
When a miner finally finds the right solution, he/she announces it to the whole network at the same time, receiving a cryptocurrency prize (the reward) provided by the protocol.
Although this blockchain system has a distinguishing feature of being able to deter cyber attacks completely, the energy consumption and combination of computer systems necessary for the procedure ranks above what an average person can afford. So, only the elite few are in the system of mining which makes it generally smaller and exclusive.
The Rising Problems And The Convenient Scapegoats!
As the mining of the aforementioned POW tokens requires a great deal of responsibility on the miner's corner, the energy consumption, in terms of electrical energy, is unreasonably high! In fact, to mine, say, 1BTC, an electrical energy sufficient enough to power about 1.5 American households per month would be needed. At large, a yearly estimation of the electricity amount used in mining bitcoin is immeasurably greater than the electricity consumption per year of countries like the Netherlands and Nigeria. Also, it is possible to mine these currencies without initially having any amount of them, causing them to fall drastically in their recent price movements and market tractions.
An unprecedented international endeavor of food crises and meltdown of economies are underway! These problems, particular to mostly, under-developed and few developing countries, will instigate, majorly corrupt officials in this regions, to shift the blame on the POW coins which unnecessarily wastes the country's resources in their mining process, thereby making the masses think in the same direction.
On the next food price crisis in the poorer parts of the world, the empty Proof-Of-Work cryptos like bitcoin, litecoin, bitcoin cash, etc. will be the welcome scapegoat everybody is looking for (esp. local officials), and everybody will use, out of opportunistic reasons, to channel the anger of the poor away from themselves. Food Price Riots usually affect the Developing world not the developed world which is by far more active in the electricity consuming crypto mining. In the past, the food price riots, regularily lead to officials in the developing world to loose their jobs to appease the starved out mob and their anger over the unsatisfying economy.
But with Bitcoin and other POW Cryptocurrencies in existance those officials now have a welcome scapegoat that they can blame with reason for the misery of the region, decentral energywasting cryptocurrencies.
For Example, the onion prices in india caused regularily for officals to lose their jobs whenever a riot happened. With the useless and energy-wasting decentralized pow coins in existance, the indian officials might have now a more stable and reliable job, as now they have a rightwise, scapegoat to blame if economic priority is bad shaped in their country. Having a look on the Food price Indexes, we can clearly observe a reality in which the intensity of food price shocks becomes more and more probable, with Bitcoin alone now wasting as much electricity as the Netherlands, which is one of the big worlds food supplier.
Furthermore, in developing countries like Nigeria which constantly experience economic meltdown due to obvious reasons of which electricity consumption is chief, the mining of these POW protocol cryptocurrencies is a catastrophic move! Mathematically, about 3 Nigerian households would be powered for a month by the same amount of electricity required to mine 1BTC. In a country which ranks among the lowest energy consuming and ranks high in economic disorderliness, the believe in the Proof of Work protocol and its adoption in such a region where, especially, BTC mining alone deprives the nation of the electricity needed for necessary industrialization, is the beginning of the end!Apart from loosing most of their electricity to the mining of POW cryptocurrencies, the country also faces major issues like inadequate food production which in turn, causes an unreasonable increase in the prices of food. Therefore, apart from the unemployment experienced by the citizens due to low industrialization, they also buy food at an incredibly high cost altogether increasing the poverty rate of the nation!
The Alternative POS Pathway
The Proof-Of-Stake algorithm system of mining cryptos, on the other hand, requires the active believe in, and adoption by miners, of the cryptocurrencies involved. Miners will need to own a considerable percentage of the total circulation of the cryptocurrency in question. With feasible measures taken to ensure optimum security of the blockchain, this system not only proves secure, but immeasurably more efficient in ways like energy consumption and cost of mining.
The technological competition on the protocols and algorithms that will define the future of the Internet — which is hoped will be a decentralized future — is just at the turning point. Unfortunately, as many first known set of cryptocurrency had no other alternative systems to the POW, they had followed one of the most absurd mining protocol. Only very few(with even large platform like Ethereum just shifting to the POS system) like (C-Pro) are completely built on the POS protocol.
With the anticipated neglect of the over-hyped unreasonable energy-consuming POW protocol blockchain, and platforms like Ethereum taking a U-turn towards a notable revolution, it is clear, however, that the future of blockchain has been determined and will solely base on the POS protocol of the blockchain transactions confirmations. By this much anticipated period of revolution, blockchain enthusiasts, miners, cryptocurrency holders and even nations, especially, the developing ones, would come to depend on a system which not only proves secure and cost-effective, but also helps in the stabilization of their economies in the most subtle ways. At the time, when banks, governments and financial institutions have totally surrendered to the economical omniscience of the blockchain, I'm sure what the POS system would have to offer us all, would be just at the beginning!
Food Price Index indicates an increasingly high food price level. CryptoCurrencies and the new Capital Market through the Blockchain will be held accountable for those.