The Global Energy Crisis: Is PoW on Its Last Legs?

With oil prices skyrocketing lately because of the US-Israel-Iran conflict, mining PoW coins like Bitcoin, Litecoin, and Dogecoin at home is getting pricier. Even places that usually have cheap electricity are starting to see hikes in costs. China’s already feeling the impact from the Iran war as oil prices climb. The trouble in getting oil through the Strait of Hormuz is definitely gonna push power prices up there. If crude oil hits $200 a barrel, we might be in big trouble. Mining BTC and other PoW coins would become super costly. It might even push a lot of miners to switch over to PoS coins that aren't as solid. What’s your take on this? Are rising oil prices gonna spell the end for PoW, or do you think it’s not that simple? Would love to hear your thoughts. Thanks!

This is why nuclear power plant is the way and the future of energy. No more fossil fuel. What we need is low carbon emission and high energy density. The future of humanity won't advance if we don't invest into it. At the end of the day if crude oil got choked to the brim just because a strait is closed, isn't it far better to eliminate the problem by switching to nuclear power plant? Anyway, I heard miners are using renewable energies so it will be less impacted than any other sector that used non-renewable energy such as AI data center.

Miners will not switch to shitcoins. They will simply stop the equipment until the bitcoin price becomes profitable. The hashrate of the network will decrease, but the difficulty will also decrease. Up to a certain balance. Something else is more interesting. The oil factor should push the price of bitcoin up, but the chaos in the economy pushes the price down (by withdrawing money from bitcoin, investors cover losses in other assets). On the other hand, bitcoin is interesting as a promising safe haven asset, which should push the price up. Of the assets of the safe havens, only gold remains, and treasuries are turning into toxic assets. Real estate and gold have huge flaws - location-based (real estate) and difficult to transport (gold) - bitcoin does not have these flaws. How will all these factors affect the price of bitcoin? Everything that used to be doesn't work anymore, bitcoin during the war and the global economic crisis is completely different from bitcoin in peacetime.

Currently, more than half of the energy for Bitcoin mining comes from alternative energy sources like hydo, wind, solar and nuclear. I think about 54% or so. The oil prices will make energy prices more expensive of course, but not to the level of putting an end to PoW. Worse case scenario, miners will reduce their usuage of natural gas even lower than the current rate which is aroun 20-35%. Not just nuclear, but other alternative sources too. Strategically placed dams will reduce flooding and also generate a shit ton of energy. We need to invest more in solar energy and wind turbines. Although the world has evolved a lot because currently, about 30-40% of the world's energy comes from oil, I feel it can be better than that. As expensive as it may seen to set up, if the world is serious, we can reduces the reliance on oil for energy to about 20-30%

Agreed especially in a country that made energy from the source of oil and gas, tho because oil is high the price of coal is get soaring too. Miner would force to shutdown their rig if mining isnt viable unless first they have dirt cheap electricity or they move to another country or the ASIC manufacturer keep producing high efficient mining that is impossible in sort of time But end of PoW is too soon in my opinion the price of oil could be finnaly had a correction just like other instrument aswell the price gonna down at the local support zone in my opinion

Coal is the more common fossil fuel for global electricity generation and not oil. The mining farm will be fine because nobody is running a generator with oil in their mining farm like ever. The cheap electricity are all coming from coal and you can be rest assured that the distribution supply isn't going to be blocked because of high availability across countries.

Do you think that the majority of current PoW mining is currently done via oil power? I'd suggest that it probably isn't. The most profitable miners nowadays will be using more renewable energy sources like wind, solar or hydroelectric. Yes, they will certainly be affected in future as the cost of everything goes up, but if they have these low cost solutions already in place then they potentially have an advantage, although if they're sourcing it from public resources then there will be increased competition for that electricity as prices rise on other sources. There may be a little bit of a backlash if prices go up and that could force the government the penalize miners that don't have their own independent energy setups. Replacement costs would go up but it's likely going to have little impact on the most efficient setups currently.

I think it's quite the opposite... 🙋 The prospect of rising oil prices and a subsequent global recession could "kill" projects based on the PoS consensus algorithm (while projects based on the PoW consensus algorithm are not at risk). The very functioning of a blockchain based on the PoS consensus algorithm requires powerful, modern computers for node owners. Without them, the network could simply cease to function. A global recession could lead to a shortage of hardware to support the cryptocurrency network. Thus, theoretically, both Ethereum and Bitcoin would suffer. However, Ethereum and Solana would be hit much harder than Bitcoin. A shortage of new hardware will not disrupt the Bitcoin network. You will continue to own Bitcoin and continue to make transactions as usual. Mining difficulty will certainly decrease, but this is not fatal... However, the functioning of projects based on the PoS consensus algorithm could be seriously hampered. Moreover, in a climate of fierce competition and resource scarcity, only the champions survive... So who is the champion in the world of cryptocurrency? Bitcoin, of course!

Oil price can rise that's true, but it does not automatically mean that PoW will just disappear or go out extinction, oil can affect small miners that do depend on regular grid power, but that don't mean that PoW won't still exist. Plenty of them has already stationed in places where they have get cheap hydro, wind, solar and unused energy sources. If the cost rises in one region all they do is to make quick relocation to another place where the  energy is still affordable. The ability to adapt quickly is what keeps PoW going even when the cost of oil or fuel is high

The rise of oil price won't end the PoW coin especially bitcoin. It's caused by both of things are unrelated. Mining was consuimg electricity, which is not tied to the oil price. However, it only happen when someone mined bitcoin used generators. Beside that so many miners are also using renewable energy to mine POW crypto. So i think the increase in the oil price means nothing for PoW coin.

things will go back to normal but it won’t be for a while. in the meantime, i think this should be a time to explore other sources and improve them. pow will not end, it will evolve.

This is certain, if the global energy crisis really occurs, this is a disaster and a real threat, one of which will have a significant impact on Bitcoin miners, especially the biggest significant impact on economic pressure and challenges. For this reason, if the increase in global energy prices will automatically increase everything, especially electricity costs, not to mention the impact on other sectors, the war on Iran, the US and Israel will not have a positive impact on the world community, in fact it will have a long-lasting negative impact in history. human life.

The rising cost of energy alone cannot mark the end of POW, it's already in the code to function that way, unless the devs makes such adjustment to the code of which I totally doubt they would be willing to. The worst that can happen is that miners who are no longer profitable would quit the network and there would be less competition for existing miners. POW is one of the driving factors of Bitcoin decentralization and tampering it would be like giving up the decentralization in Bitcoin.

Most countries use crude products to power electric generators. So an increase in the price of crude oil will increase the cost of generating electricity. This will also lead to an increase in electricity bills for Bitcoin miners. However, a research shows that 90% of global hashrate operates in electricity markets where power prices have minimal correlation with crude oil. Countries like the United States, Russia, and China depend more on natural gas, coal, or hydroelectric power than crude oil.

Who is "we" in your situation, and how are "we" doomed? And whom does that hurt exactly? I see many other areas in the world being more in the danger zone then bitcoin mining. During bear markets bitcoin has been too expensive to mine in many countries anyway. Difficulty will adjust when hash power decreases and people could even start to compete by mining with renewable energy. Only thing that could hurt bitcoin is that if that energy crisis is going to be severe enough, and people can't afford electricity, they will turn against anything that takes a huge chunk of that energy and makes it more expensive to them. One of those could be PoW mining. And that could lead to bitcoin mining could become illegal, at least in industrial level. No one could prevent anyone mining in secret though.

For sure there are so many alternative sources. China is doing solar farm and others are using wind turbine, even sea waves can produce electricity if being taken advantage in the right manner. Its just that the market is short sighted and only want to maximize extraction so oil is being used for electricity and any other form of non renewable energy. This kind of thing is what makes the blocking of strait of hormuz capable of crippling economies around the world in the first place. Should've invested on a better energy than just chasing maximum profit.

The list of victims will also include the supplying countries because their oil sales will decrease and they will suffer financially. In general, every country is facing a huge disaster. In the past, I read an article that predicted that World War III would be fought over oil. I think we are in that reality. Iran's infrastructure has been destroyed due to the constant bombing by the US and Israel and there is no prospect of stopping the war. If Iran does not open the Strait of Hormuz, which is within their borders, the global oil crisis will intensify. The increase in the cost of mining cryptocurrencies will increase the price in the future. Using renewable energy may be the best strategy to reduce the cost of mining. If the energy crisis increases further, mining will slow down because most projects depend on oil. Gradually, cryptocurrencies will become a scarce resource and the price will increase more likely.

Fossil fuels aren’t the only way to generate electricity. You can also do it with wind and solar power. Mining farms that are using renewable energy will continue to thrive. Overall hashrate might go down, but eventually it will recover as mining shifts towards those renewable energy sources. Staking coins and mining bitcoins are two very different things. If a mining operation becomes too unprofitable I would think those miners would sell their equipment and use the funds to start another business. They would likely prefer something with steady, predictable returns and not something volatile and risky like altcoin staking.

It's already happening in my country, the government decided to swap all the old meters into new ones and they are very terrible compared to the old, me pay more for electricity now and the new meter is consuming more than before, I don't know how they do it, this is why some states in my country are avoiding the new meter and yet the government said it's compulsory to start using the new ones, I suspected a evil plan. Lucky me I only use grid power to pump water to the house, I started using solar panels since 2021 I guess? It's been long already and the few Asic miners that I got running are all on solar power, it would have take a tow on me if I am using grid power.

Your point is very realistic and its means that increase in oil prices can not  automatically affects on daily work in sense of complete extinction of work. Because with the increase in oil prices the cost of electricity is also increased but its not directly affects on mining department because many miners depends on other natural resources like wind, water and solar energy thats are much cheaper than oil. Along with mining bussines is don't depends on one location and its a highly mobile so if electricity increased in one region than the miners can shift towards cheaper site. So this type of flexibility helps to maintain Power sector network. But this facts are related to large scale miners and no doubt small miners are faces the crises of electricity. So no doubt oil prices affects the mining process nut its not means that if oil prices increases its may eliminates the power sector.