In this episode of the Bitcoin Halving 2020: Miner Perspective podcast series, we take a trip down memory lane back to the early days of bitcoin when miners first began competing for network rewards.
“I think the introduction of [Application Specific Integrated Circuits] was a watershed moment in terms of changing the way bitcoin was mined and secured,” said Galen Moore, senior research analyst for CoinDesk. “If you know that a more powerful machine will get you more reward, make your business more profitable, you’ll be looking for the next more powerful machine all the time knowing that your competitors are doing the same.”
Dave Carlson who participated as a bitcoin miner in the arms race for more advanced cryptocurrency mining machinery back in 2012 and 2013 admitted that at the time “the Chinese engineering firms and Chinese producers of this technology far surpassed our ability and speed to get something to market.”
However, there was a turning point in 2015 and 2016 when mining operations in China started to subside and coalesce in other regions parts of the world such as North America. More efficient power production, Carlson said, was the primary motivation for this shift.
In lead-up to the next bitcoin halving event in May, some bitcoin miners are looking at leveraging what Moore and Carlson describe as “surplus energy” to make operations even more cost-effective. Surplus energy is the run-off or waste fuel released by natural gas and hydro power plants that can be repurposed to mine bitcoin for zero cost. This could be a major technological breakthrough for mining if proven to work at a large scale, Carlson said.