When Satoshi Nakomoto mined the first Bitcoin in 2009, the plan was to make the digital currency free of any control from banks and governments. As a result, Bitcoin runs on peer-to-peer technology to make payments, which means it is powered by a complex network of computers working to maintain the Blockchain. These computers are sophisticated and use a lot of power – more than even some countries in the world.
According to available data, if Bitcoin were a country, it would be ranked 30 on the list of top energy-consuming nations. Cambridge researchers say it consumes around 121.36 terawatt-hours (TWh), and this is unlikely to fall unless the value of the currency drops.
Why do Bitcoin transactions require much energy?
Although Bitcoin is a transformative technology influencing the industry, there are concerns about the amount of electricity it requires for continuous operation. It’s important to note that Bitcoin didn’t start with this power consumption level. When the technology first came into existence in 2009, all needed for mining was a PC, as all computers could mine Bitcoin.
The reason for a computer was so miners could solve computational problems, which progressively became more complex, leading to the need for sophisticated computers that could solve those problems. Additionally, with more miners joining the fray, competition became intense as they had to compete against each other to win the right to add the next block to the Blockchain and earn rewards.
Today, the Bitcoin network relies on thousands of miners running advanced machines 24/7 to solve mathematical problems and win rewards. It’s important to note that even though thousands of miners compete against each other, only one miner can add a new block every ten minutes, leading to a waste of lots of energy.
Because the more computing power a miner has, the more likely they’d be able to solve the problems in a shorter time and earn rewards, many miners are forced to scale up or upgrade their equipment. Apart from the fact that the equipment consumes more power for operations, another notable problem is heat generation when performing hashing functions, so provision has to be made for cooling systems so the machines can be efficient and not burn out.
All of these contribute to making the total mining network a huge energy hog.
What can be done about Bitcoin’s energy problem?
Much like other cryptocurrencies, Bitcoin’s operation is largely dependent on fossil fuels, which means extra carbon emissions. However, it’s important to remember that Bitcoin doesn’t directly produce a large carbon footprint as it can run on electricity generated from renewable sources. Thus, one of the ways Bitcoin’s energy problem can be resolved is by switching to greener alternatives.
Another way to address this problem is by transitioning to a more efficient verification system, as proof of work is inherently wasteful. For instance, proof of stake is more energy-efficient. It works by selecting validators in proportion to their quantity of holdings in Bitcoin. The switch will also help eliminate the competitive element and curb wastage.
The widespread adoption of Bitcoin has created a major problem – massive electricity consumption. However, this doesn’t make Bitcoin bad, as traditional banking systems consume twice the energy of Bitcoin mining. Nonetheless, adopting crypto miners such as Whatsimer or Antimers for Jsbit.com can help make the network energy-efficient without causing any disruption.
Post time: May-26-2022