Bitcoin Mining Wasting Enormous Amounts of Energy
Bitcoin requires huge amounts of energy to exist and many energy experts are worried about how this will affect the environment in the long term. Bitcoin uses so much energy that some have estimated that bitcoin mining currently uses the same amount of energy as the entire country of Ireland. And, because cryptocurrency mining is rising and consuming even more energy, it’s estimated that it will require drastically more energy in the coming years.
To understand why bitcoin uses so much energy, you need to understand how its created and maintained. Bitcoin, along with other cryptocurrencies, is commonly confused with a stock. In actuality, it’s a new kind of currency, one that doesn’t use a central bank or government to issue the currency, regulate it, or keep records of it. Instead, bitcoin is created by a network of “miners” all across the world, who all record bitcoin’s transactions (collectively called the blockchain) and are in return rewarded with new units of bitcoin.
The constant computer processing needed to “mine” bitcoin and other cryptocurrencies are what causes it to use such enormous amounts of energy. As cryptocurrencies rise in value, the incentive to mine it becomes greater, causing more and more people to set up mining stations. While anyone with a computer can mine bitcoin, much of the world’s bitcoin is mined by mining hardware companies, which have large amounts of processing power set up to continuously mine. These huge amounts of mining, of course, also end up using huge amounts of energy.
Currently, mining is a secretive process. So it’s impossible to know what kind of energy miners are using. But some environmental experts worry that bitcoin production is causing an increase in the use of coal-created electricity, due to the large amount of mining hardware companies in China, which favors coal.
The rate at which bitcoin is being mined could end up being environmentally unstable to maintain if miners don’t seek the use of clean forms of energy to power their mining. One Austrian company is already mining with clean energy: HydroMiner is a mining company that rents or buys hydropower stations to power their mining machines. Most mining companies, however, haven’t taken many— or any— steps to reduce their energy impact.
Whether or not bitcoin, and other cryptocurrencies, are worth using all this energy seems to be a matter of how one perceives the currency. Those who view bitcoin as just a novelty, and an asset waiting to have its bubble burst, are likely to think its a massive waste of energy. However, those who view cryptocurrency as the money of the future, as a revolutionary new creation that could change society, are likely to feel that using all this energy will be worth it in the long term.
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