Bitcoin Craze and Why It’s using More Energy
than We Can Produce…
The Bitcoin craze has died a bit but don’t think it’s disappeared. Bitcoin, still alive and well it not all it’s hyped up to me and more recently stock has tremendously plummeted. None the less, Bitcoin is also not that eco-friendly. The man power and energy is takes to mine Bitcoins is astronomical. Unlike what we already have using things such as Paypal, CashApp, Zelle, Western Union, etc; Bitcoin is the most high sought after and also the most energy using. We’ll discuss what Bitcoins are, what you need to know, and sustainable ways to incorporate the need and supply for Bitcoins.
Many of us are not even sure what a Bitcoin is to be exact. I ran across one story where a gentleman was getting over on people by selling them fake gold coins as Bitcoins for a 1,000 a piece! So let’s start with a couple of definitions and need to knows:
- Bitcoin: A type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify and transfer funds; operating independently of a bank. (sending and receiving money without using a bank or US dollars)
- Bitcoin mining: the process by which transactions are verified and added to the public ledger, known as block chain, and also the means through which new Bitcoins are released.
- Bitcoin miner: every so often mining computer collect few hundred of pending bitcoin transactions (these are called a block) and turn them into a mathematical puzzle. The such miner that gets the solution gets 25 bitcoins as a payment but only after another 99 have been added to the ledger.
- Mining: lingo used for the discovery of new Bitcoins (just like a gold digger find gold) a Bitcoin miner finds Bitcoin “algorithms” to say and furthermore verify the transaction once it is de-coded.
This is a basis of information we can work from. Now, the energy needed to mine Bitcoins is very contentious but other methods pose a very high security risk. There was a recent warning from facilities in Ireland saying that Bitcoin mining in their area alone, exceeded the amount of energy annually by the country’s homes in total in a couple of months. This alone can turn into a potential energy shortage which is very alarming to them ( but not everyone sadly). Most critics say that the Bitcoin mining is as useless and pointless as having a no money at all and there needs to be a more efficient and cleaner system that what has been going on. But others say the uselessness of the mining is what’s keeping it going.
Mining takes an immense amount of computational power because as more and more machines are used, the quicker a miner can de-code the blockchain. The hardware also are not cheap and the electricity consumption is high as everyone has recognized but sweeping under the rug. The more “guessing until the miner gets it right” the miner does, the more amount of energy that has been consumed. Now just image a simple guess the number between 1-20; now guess every number until you find the right that I’m thinking of- yup! that’s what these miners are doing. and every guess cost you an amount of energy. The problem with these million of mini guesses is that these small guesses until you get the right one still uses energy but serves no purpose or gives them no productivity outside of the mining itself for Bitcoins. (but aren’t there numerous things we can think of that serve no purpose but for the exact thing it’s being done for?)
Seems as though there are a numerous amount of these such companies: Primecoin, Gridcoin, BOINC, SolarCoin, and MangoCoinz. These projects after initial excitement, only had limited resources and are only marginally used today. Big or large company: “Many believe that mining, while energy sapping, should remain resource-intensive to make it prohibitively expensive for any single entity to gain sustained control over the decentralized system. Given how quickly computing technology develops, perhaps an alternative method will be found. Until then, we appear stuck- for better or worse- with a drain on computational system and energy resources to power bitcoin and other cryptocurrency networks securely.” One reporter notes bitcoin mining will consume “…all of the World’s energy by 2020.” Other experts say, “…bitcoin probably uses as much as 1 to 4 gigawatts, or billion watts, of electricity, roughly the output of one to three nuclear reactors. That would amount to less than 1 percent of U.S. electricity alone and no more than 0.14 percent of global electricity generation.That won’t devour the world’s entire electricity resources, but it’s a significant drain — and it’s growing fast.”
Harald Vranken, a professor of management at the Open Universiteit in the Netherlands, has calculated a similar number. On Jan. 1, he calculated the energy usage at .1 to .5 gigawatts, but with the bitcoin explosion this year, he thinks it has increased to between 1 and 4 gigawatts“It will only go up if things increase like they have been doing in the last four months,” said Vranken. “So at some point in time, I think, this situation cannot hold. I think that is clear.”
Not only normal 9-5 people but millionaires are investing in this Bitcoin craze; but the big blow out of it all had triggered doubts in everyone’s mine of the stability of it all as a normal form of currency. Sadly all forms of cryptocurrency use data centers which consume energy- about 1.8% of all U.S. electricity on which Bitcoin uses a fraction of thus. Experts say the use of electricity will increase in the next couple of years with Bitcoin rising or not. ““The amount of energy going into mining is largely a product of the price of bitcoin and the type of hardware being used,” Hartnett said. “As the price goes up, there are stronger incentives for miners to add new computing power or new hardware or attract new operations to mining. In either case, you’d be adding to total computing power of the network, which influences the difficulty of the hash problems that miners are raising. If bitcoin’s price, and concurrent energy consumption, continued to rise at the clip seen this year, that could be a serious problem. But it’s less clear whether the current rate of growth in consumption would continue. Claire Henly, a manager at RMI, said “there are two ways this problem can be solved.” There can be changes to the protocol of bitcoin that would allow for reduced energy spent, or users could switch to other cryptocurrencies that require less energy expenditure.””
Sadly there aren’t many answers to the way to not use so much energy or how Bitcoin can survive with less energy consumption. There has been suggestions of burning old tires or coal to power it but there’s not much evidence to support it and how it would work.
In conclusion, Bitcoin could survive all the attack and thrive through. It could become the next form of currency or it could be the pathway for other and better programs to develop on the blockchain system. But at this point just as it came, it could go and be a matter or remembering what it use to be in the “good ‘ol days…” Me personally, I don’t think we have much to worry about in the next 5-6 years. If it survives through those then it may be something that we should all pay attention to. What do you think? Will Bitcoin be the new PayPal/Credit Card/Currency?
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