Starlink Bitcoin Mining and Decentralization – Bitcoin Magazine
This is an opinion editorial by El Sultan Bitcoin, former CEO of Coinspree and current Director of Product Marketing for Latin America at Ledn.
How mining decentralization can be encouraged
More than a year has passed since the great migration of bitcoin mining began, when the network saw a reduction of more than 60% in hash rate due to the Chinese Communist Party’s attack on mining. of bitcoin. The consequences of China’s mining ban have allowed the United States to absorb more of the hash power that was previously in mainland China. The hash rate has recovered and is again at all-time highs. No question arises regarding the resilience of Bitcoin here. However, one wonders how network and mining decentralization can be encouraged to limit the impact of similar attacks on Bitcoin.
Lack of internet access is a barrier in remote locations
Even though mining is a globally distributed activity, miners flock to sites based primarily on energy costs. As covered by Nic Carter, energy is a local phenomenon. High concentration power generation sites are generally located in remote areas; Quebec, Canada, and Sichuan, China are two excellent examples. Here, installed hydroelectric capacity exceeds electricity demand, and because energy is not a readily transportable commodity, generators with excess capacity find themselves wishing for other buyers or bearing the energy waste of their operations. Essentially, that’s why wasted energy is minor platonic love. In the form of a jurisdiction-independent bidder, bitcoin miners can be buyers of last resort to monetize stranded energy.
However empowering the subject, in practice trying to mine low-cost, energy-rich sites often involves having to run large-scale mining operations, and when it comes to remote locations, Internet connectivity can be another issue. For a multi-million dollar mining farm, access to corporate satellite internet service won’t be much of an issue, as the size of their revenue would show these minimal connectivity costs on their tax returns. In contrast, this leaves the likelihood of the average Joe living near blocked energy locations out of the equation.
How Starlink would enable remote Bitcoin mining
Individual Internet connectivity has reached 60% of the world’s population. This implies that there are now less than 3 billion people “unconnected” to the internet, with the majority of these people located in South and East Asia and Africa.
Improving the quality and reliability of people’s connectivity is also an unresolved issue: enter Starlink. Led by SpaceX, Starlink aims to bring high-speed, low-latency internet access to remote and rural areas around the world. Leveraging SpaceX’s experience building rockets and spacecraft, their mission is to deploy the world’s most advanced broadband internet system.
Hardware costs to set up a Starlink access point run around $600 on top of $3,000 per month. Even though the outlay might be considered high for the average person, imagining how it might impact Bitcoin raises some interesting theories.
How Bitcoin Mining in Remote Locations Could Accelerate Hyperbitcoinization
Imagining miners subsidizing Starlink costs in rural areas to tap into stranded power while still enabling internet connectivity might not be that far off, given that we have a bitcoin miner powering greenhouses across the country. -Down. If wasted heat generation is subsidized to grow produce and bloom flowers in one place, so can the activation of internet services in unconnected areas in exchange for newly minted bitcoins.
How this might also play a role in reducing network centralization by Internet Service Providers (ISPs) may also be of interest. As reported by DARPA “Are Blockchains Decentralized?” article, “For at least five years, 60% of all Bitcoin traffic has passed through just three ISPs.” Additionally, “As of July 2021, approximately half of all public Bitcoin nodes were operating from German, French, and American IP addresses, of which the top four are hosting providers (Hetzner, OVH, Digital Ocean, and Amazon AWS). “
On the other hand, community-based approaches seem to be proliferating within the Bitcoin ecosystem to reduce centralization. With projects like Fedimint looking to accelerate decentralized custody and home mining setups that have been gaining interest in recent years, one might wonder:
“Is Starlink poised to become one of the catalysts for last-mile bitcoin mining and network decentralization?”
That remains to be seen.
This is a guest post by El Sultan Bitcoin. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.