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Photonics Bitcoin Mining Tech Aims to 'Democratize' Energy Use

Three researchers have published a paper at Cornell University’s proposing a system called Optical Proof of Work (OPOW) to potentially be employed in Bitcoin mining. According to the paper, “heavy reliance on electricity has created scalability issues, environmental concerns, and systemic risks.” The authors state that silicon photonics could be used to shift mining costs away from energy-intensive to hardware-based costs, lowering the economic and environmental impact, adding greater security, and “democratizing” mining.

Also Read: Canadian Company Commissions 3 Bitcoin Mining Units to Restart Oil Well

Optical Proof of Work

The system proposed by authors Michael Dubrovsky, Marshall Ball, and Bogdan Penkovsky is described as “a novel POW algorithm, Optical Proof of Work (OPOW), to eliminate energy as the primary cost of mining. Proposed algorithm imposes economic difficulty on the miners, however, the cost is concentrated in hardware (capital expense-CAPEX) rather than electricity (operating expenses-OPEX).” In other words, the paper’s proposal is that photonics could potentially enable much more energy efficient mining, which might have a number of effects on the industry.

The “Optical Proof of Work” paper states that “Rapid growth and improvement in silicon photonics over the last two decades has led to the commercialization of silicon photonic co-processors (integrated circuits that use photons instead of electrons to perform specialized computing tasks) for low-energy deep learning. OPOW is optimized for this technology such that miners are incentivized to use specialized, energy-efficient photonics for computation.”

Many questions remain as to the proposed implementation, however, centering on the economic realities of market competition and economies of scale, as well as changes at the algorithm level which would need to take place. Also, although the proposal is to make mining hardware much more specialized and difficult to acquire, unique from system to system (to disincentivize risks like 51% attacks), footnotes in the paper admit there could be exceptions. “Although not impossible, a coordinated effort to rent on the order of half of the hardware on a network would be difficult to hide and owners of hardware have an incentive not to rent to attackers, as the hardware is likely to lose value if the network is attacked.”

Photonics Bitcoin Mining Tech Aims to 'Democratize' Energy Use

Dubrovsky’s Thoughts on the Proposal

Michael Dubrovsky, Co-Founder of Powx, and one of the three researchers behind the paper, shared some insights regarding the project with via email, detailing: “Our first live implementation will be with a partner network that will start using OPOW Q1- Q2 2020. We’re hoping to see broader adoption (eventually Bitcoin) after the first implementation proves the concept.” When asked about how photonics might affect competition in the industry, and whether large mining operations wouldn’t simply use their current energy capacity to power even more miners, he replied:

It’s a bit counterintuitive. The additional [hardware] miners will buy with their energy savings will add some marginal energy use but if the hardware is ultra-energy efficient, you still get a huge energy savings.

“There’s a section on this in the whitepaper but we go into it in more detail in our upcoming academic paper,” Dubrovsky elaborated. “We will release V1 in a few months. Heavyhash is not that complicated so it doesn’t require a massive library of code. We’ll also publish chip design files for our prototypes.”

Photonics Bitcoin Mining Tech Aims to 'Democratize' Energy Use
A prototype photonic miner setup without wiring. Source:

The paper describes heavyhash as a custom hash function and states: “In its simplest form, OPOW is the Hashcash algorithm with our custom hash function, Heavyhash, designed specifically to run efficiently on optical accelerators while preserving all POW-necessary cryptographic security properties.”

Photonics Bitcoin Mining Tech Aims to 'Democratize' Energy Use

Some commenters on Dobrovsky’s Twitter post on the subject voiced concern with a proposed changeover which, in the researcher’s words, would be a soft fork to the existing protocol. It’s clear that both protocol-level and economic doubts remain, including questions regarding the totally new field of competition that would presumably be created for the best photonic chip, hardware, etc. Whether or not mining could ever be democratized in the sense of helping “the little guy” remains to be seen, and only the future will tell if photonics can indeed bring about significant change in the bitcoin mining industry.

Do you think photonics has potential to change the bitcoin mining industry? Let us know in the comments section below.

Images credits: Shutterstock, fair use.

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Graham Smith

Graham Smith is an American expat living in Japan, and the founder of Voluntary Japan—an initiative dedicated to spreading the philosophies of unschooling, individual self-ownership, and economic freedom in the land of the rising sun.

Graham Smith , 2019-11-29 15:45:54 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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