Bitcoin uses more electricity than Argentina!

According to analysis by Cambridge University, Bitcoin uses more electricity annually than the whole of Argentina.

Producing Bitcoin requires mining.

Bitcoin mining is the process of creating new bitcoin by solving a computational puzzle. Mining is necessary to maintain the ledger of transactions upon which bitcoin is based. Miners have become very sophisticated over the last several years using complex machinery to speed up mining operations. (Investopedia)

It is very power hunger and uses lots of heavy computer calculations to verify transactions. Cambridge researchers have said that it consumers over 121.36 terawatt-hours a year. While it is unlikely to fall, unless the value of Bitcoin decreases. With critics saying that Tesla’s decision to invest in Bitcoin heavily undermines it’s environmental image.

Bitcoin hit a record £34,820 this week. Following Tesla’s announcement that it bought $1.5Bn in the cryptocurrency and it’s planning to accept it as payment in the future, the value of it is unlikely to drop any time soon.

So, the price of Bitcoin rises and so does the incentive for miners to run more and more machines. Which in turn causes more energy consumption.

Bitcoin & Energy Consumption

“It is really by design that Bitcoin consumes that much electricity,” Mr Rauchs told BBC’s Tech Tent podcast. “This is not something that will change in the future unless the Bitcoin price is going to significantly go down.”

Bitcoin’s energy consumption is above Argentina (121Twh), the Netherlands (108.8TWh) and the United Arab Emirates (113.20 Twh) while it is gradually creeping up on Norway (122.20 TWh)

The online tool has ranked the cryptocurrency electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) – and it is gradually creeping up on Norway (122.20 TWh).

The energy it uses could power all kettles used in the UK for 27 years. However, the model also suggests that the amount of electricity consumed every year by always on by inactive devices in the US, could power the entire Bitcoin Network for a year!

Those that mine will occasionally receive small amounts of Bitcoin. Though this is somewhat of a lottery. So to increase their chances of getting some. People will often connect large numbers of miners to a network. Even entire warehouses full of them. Which you can imagine uses lots of energy!

The model uses the economic lifetime of miners and assumes that all the mining machines are working with various efficiencies. They used an average electricity price of 5 cents and the energy demands of the Network. You are then able to estimate how much electricity is being used at any one time.

Bitcoin & Environmental conundrum

“Bitcoin is literally anti-efficient,” David Gerard, author of Attack of the 50 Foot Blockchain. He went on to explain to the BBC that even using environmentally friendly equipment won’t help as other more efficient mining hardware. Which is not environmentally friendly would just work better, which in turn means more cash effectively.

Mining uses electricity from coal, so there is an environmental issue with mining Bitcoin. More computers means more energy use means more CO2 production and the ever increasing price of Bitcoin only means that it will get worse.

After Tesla bought over a Billion dollars in Bitcoin the price of the cryptocurrency rose rapidly and is the complete opposite to Tesla’s good work with promoting energy transition.

The price of the popular cryptocurrency rose rapidly on Monday after Tesla announced its investment.

(BBC)

Questions

Will it replace money
Will any cryptocurrency replace money
Do you have any
Do you understand it
Will it become environmentally friendly
Is it a fad
What do you think will replace money if at all?
What has Tesla done to the market, will it now take off
Is it too expensive
How can it become environmentally friendly

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