Regulating cryptocurrencies has been a hot topic for years now. While some believe regulation would be hypocritical to an ETHos whereby users govern their own network and money, is there anything to be said for regulating aspects of cryptocurrency…say a cryptocurrency mining regulation for example?

Cryptocurrency Mining Regulation – Here’s Why It’s Important

No matter how you look at it, cryptocurrency mining has become a mega business. No longer the lay-mans game, if you want to compete in mining for Bitcoin (available on Coinbase), you need serious rigs that run in the thousands.

The key to mining successfully is pretty straight-forward; the more energy you burn, the faster your computer can compute the complex mathematical equations, and this means you are more likely to “win” Bitcoin (available on Coinbase).

Bitcoin (available on Coinbase) is becoming harder to mine as there is fewer Bitcoin (available on Coinbase) left to be mined. As a result, the energy necessary for an operation to mine an entire block and receive a dozen Bitcoin (available on Coinbase)s has reportedly been the same as powering a small house.

What Does This Mean?

Because of the price value of each Bitcoin (available on Coinbase) (today it is worth $6,417), the costs of mining are considered justified as the coin value still outweighs the expenditure in using such huge quantities of energy. However, to put this in perspective, back in January the Credit Suisse ran a report that claimed that nearly 80% of miners’ winnings, go back into funding electricity consumption.

So let’s look at the math to really realize this amount of energy expenditure.

Let’s Do Math

If I have received 12 Bitcoin (available on Coinbase)s from a successful mining venture, then — based on BTC’s current value — that equals $77,004. 80% of that figure goes back into the cost of running my operation and that equals $61,603.20.

Just think of how many homes you could power with $61,603.20 every year? And this is just one entire block mined.