When Bitcoin’s critics focus on the Bitcoin mining industry’s raw energy consumption, they forget the big picture: cryptocurrency production is a competitive market process. Because the cost of extracting Bitcoin comes mainly from electricity consumption, bitcoin extraction is concentrated in places where energy is cheap or surplus. . The industrial-scale mining facilities are located in very remote areas with hydroelectric, nuclear, geothermal or undeveloped and undeveloped industrial regions with excess production. Energy is expensive and miners will always look for the best sources of energy efficient and inexpensive in the world. The extraction of cryptocurrencies is a way to exploit underutilized energy resources for valuable purposes: the maintenance of a monetary system. No other industry can quickly move into an industrial ghost town and create value as Bitcoin mining companies do.
In addition, the total energy consumption of Bitcoin is limited by economic considerations: crypto-miners will continue mining only when their profit will be greater than the cost price. electricity. The Bitcoin network automatically adjusts the difficulty of extracting new blocks in response to the “hash rate” or the net pull capacity of the network. This means that Bitcoin has a ceiling on energy consumption and can dynamically adapt to energy prices and innovation in hardware. Currently, humanity consumes about 17.7 terawatts a year. The Economist estimates that Bitcoin uses 2.55 gigawatts, or 0.014% of that consumption. Some estimate that the total use of cryptocurrencies is 7.7 gigawatts, but it is likely that a single cryptocurrency will dominate after the current break-in period.Mining is only a small part of the blockchain economy, he says. “By February 2020, [Bitcoin] will use as much electricity as the world today” assume that growth energy consumption will be proportional to the adoption of cryptocurrency.
However, mining is only a small part of the blockchain economy and its adoption does not mean that more people are extracting bitcoin. The purpose of the cryptocurrency operation is to provide a market-based and fraud-resistant platform for establishing bitcoin ownership. Once the property is secure, an almost infinite number of transactions can be made with Bitcoins without any additional extraction. By the end of 2017, the Bitcoin network had reached the limit of the time it could process transactions and in response, the cryptocurrency community focused on technologies that would allow the network to adapt (to grow) to the entire global economy. There is active debate and experimentation on the best solution for scaling up Bitcoin, but they all share the goal of allowing more transactions to be processed through the network without significantly increasing the requirements for calculation, material and energy.
Cryptocurrency mining is only the tip of the blockchain. iceberg. Second-layer transaction networks such as Lightning Network and other off-line transactions do not involve mining and consume much less power. Although the total use of energy by Bitcoin increases with adoption, it is quite possible that mining never exceeds 0.01% of the global energy consumption it consumes today. . Think about gold: it takes a lot of energy to extract from the ground. Once mined and turned into coins, the use of gold requires less additional energy. As a digital entity, Bitcoin transactions require far less energy than gold or fiat transactions (paper money). Criticisms of Bitcoins are missing here: crypto-currencies are not a zero-sum game, they were created to solve a real problem. By eliminating the need for middlemen in financial transactions, Bitcoin and other blockchains can free up billions of people around the world and free up much of the economy for more productive purposes.