Why Does Bitcoin Use 10 Times More Electricity Than Google?
The bitcoin market now exceeds $1 trillion with its price rising tenfold in a year, but focus is shifting towards the massive power requirements needed to sustain the online currency
London, (UrduPoint / Pakistan Point News - 17th Mar, 2021 ) :The bitcoin market now exceeds $1 trillion with its price rising tenfold in a year, but focus is shifting towards the massive power requirements needed to sustain the online currency.
Here are some questions and answers about bitcoin: - How much energy does it consume? Total energy consumed by the bitcoin mining process could reach 128 TWh (terawatt-hours) this year, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI), which is compiled by Cambridge University researchers.
"These numbers can appear large when compared to medium-sized countries or emerging technologies like electric vehicles (80 TWh in 2019), but small when compared to other end-uses," such as air conditioning and fans, said International Energy Agency analyst George Kamiya.
Economist Alex de Vries, who put together one of the first indices on the subject in 2016, is even more pessimistic.
Bitcoins are earned by people in the network called "miners", who solve deliberately complicated equations using brute force processing power, under the so-called "proof of work" protocol.
The protocol is designed to maintain network integrity, ensuring a stable supply of the Currency by making the calculations more difficult when many people are mining, and easier when few miners are at work.
The system is designed so that around every 10 minutes, the network awards some bitcoin to those who have successfully cracked the puzzle.
"Proof of work" was one of the founding principles of the best-known cryptocurrency, created in 2008 by an anonymous person or group that wanted a decentralised digital currency.
Bitcoin struck an all-time peak at $61,742 last Saturday on feverish investor demand.
- What is the environmental impact? Bitcoin advocates say that rapid development of renewable energy in the power plant sectors means that the currency has a moderate effect on the environment.
But researchers at the University of New Mexico estimated in 2019, before the recent price takeoff, that every Dollar of value created by bitcoin generated 49 cents of health and environmental damage in the United States.
Hit by international sanctions that prevent it from exporting its oil and benefitting from cheap and abundant electricity, miners have multiplied in the middle Eastern nation in order escape the eye of Washington.
"There's about five to 10 percent of mining that can be traced to Iran," calculated Michel Rauchs.
But they migrate north during the dry season, where electricity is produced by lignite, a particularly polluting coal.
- Is change possible? Critics have become more vocal with bitcoin's rising popularity.
But bitcoin would face huge difficulties in adopting such changes, which run the risk of making the network less decentralised and secure.
Proof-of-work "is so deeply ingrained in its value, in its culture, it would amount to a sacrilege," to abandon the protocol, said Rauchs.
He pointed out that no major reform of the cryptocurrency has been adopted by its community, despite numerous attempts.