A lot of critics say that cryptocurrencies aren’t practical considering the energy-intensive mining activity. According to some, there was even a claim that Bitcoin mining was at one point enough to power an entire country. And also, there were those who claim that Bitcoin would increase the earth’s temperature by two degrees.
Recently, MIT researchers came up with an idea to have their own cryptocurrency. Named Vault, the researchers were able to decrease the data needed in order to join the network as well as to verify the transactions. It was reported that they were able to make it up to 99% more efficient than other cryptocurrencies.
In order for a user to join the network, you will have to download all the transaction data from different blocks. This makes it possible to verify transactions. Unfortunately, it becomes impractical and slows down the entire process completely.
The vault is expected to be presented at the coming Network and Distributed System Security Symposium. It is expected that the technology will showcase the ability for users to join the network by only downloading a small fraction of the total transaction data.
According to Derek Leung who is a graduate student at MIT, “The paper title is a pun. A vault is a place where you can store money, but the blockchain also lets you ‘vault’ over blocks when joining a network”. He also added that “When I’m bootstrapping, I only need a block away in the past to verify a block way in the future. I can skip over all blocks in between, which saves us a lot of bandwidth”.
Better Than Bitcoin?
According to their experiment, the vault was able to reduce the bandwidth for joining the network by 99% if compared to Bitcoin. Also, it was considered 90% more efficient than Ethereum. Ethereum is said to be today’s most efficient cryptocurrency.
Is it secure? Considering the number of ways that someone can attack a network just like the 51% attack, the researchers claim that Vault offers tight security that is equal to top cryptocurrencies. The cryptocurrency was built on top of Algorand.
Cost of Mining is Higher Than The Cost of Bitcoin
JP Morgan has been considered as one of the biggest critics of Bitcoin. The bank pointed out that there is a possibility that Bitcoin will bottom at $1,260 if things don’t change. The cost of mining according to the American bank is actually higher than the actual price of Bitcoin.
And this has been happening for a few months already. Since Bitcoin fell below $4,000, Bitcoin mining costs at around $4,060. Some may argue that an equilibrium will be met one of these days and the difficulty will drop.
However, in China, the mining costs for Bitcoin remains at around $2,400. And a majority of the Bitcoin miners are located in this part of the world. According to some analysts, there is also a possibility that the cost of Bitcoin mining could be just around $1,260.
Could a more efficient version of a cryptocurrency be what everyone is waiting for? How is it going to affect Bitcoin and other cryptocurrencies?