Bitcoins are considered to be one of the best cryptocurrencies available in the market and has the largest market capitalization among cryptocurrencies. But other than the volatility recently a new controversy has raised against the digital coin. In this article let’s look at how this cryptocurrency consumes a lot of energy which is more than the consumption of certain countries.
Bitcoin Mining - Latest News
Tesla had recently announced that it would not accept the payment through bitcoins for the purchase of their electric cars citing the reason that mining of bitcoins consumes a lot of energy and it is harmful to the environment. In this article let’s look at how this cryptocurrency consumes a lot of energy which is more than the consumption of certain countries.
How Bitcoin consumes so much energy?
The mining of bitcoins is where the major energy is consumed. It is considered to be power hungry where the top end computers are used to verify transactions that use heavy software which consumes a lot of energy.
It is estimated that bitcoin mining consumes around 121.36-terawatt hours of energy on an annual basis which is not expected to reduce until the price or value of the cryptocurrency falls. The rising of price and demand for bitcoins will let the miners to run more and more machines which will increase the power consumption.
It is considered that if bitcoin was country, then it would be part of the top 30 energy users around the world. It was found that bitcoin consumed more energy can certain countries like Argentina, Netherlands and United Arab Emirates.
The energy consumed by bitcoin is expected to power up all the kettles used in the United Kingdom for the next 27 years.
How does miners mine Bitcoin?
If the bitcoin miners have to mine the bitcoins, they will have to connect to the cryptocurrency network using the specialized computer systems. The miners will have to verify the transactions and record them on the blockchain network and they would get a bitcoin in return as a payment.
The miners to increase their profits they would often connect a large network of miners into the network, at times even a full warehouse of miners. This would lead to an increased usage of electricity as the computers or the systems would be working constantly to record the transactions on the blockchain network.
In the beginning, when bitcoin was introduced, mining of the cryptocurrency was much more easier and didn't required the high-end systems but as the demand increased the bitcoin miners are forced to use a specialized system that are fast enough to withstand the competition.
Environmental Damage due to Bitcoin Mining
David Gerard who is the author of the 50-foot blockchain had explained that bitcoin is actually anti-efficient. He conveyed that even if someone finds a hardware or a system which is efficient it would just compete with the similar hardware and make it inefficient. This means that the energy usage of bitcoin and the emission of carbon di-oxide will just increase as the demand for the cryptocurrency keeps increasing.
Solution for Bitcoin mining
The only solution as of now is to move to a sustainable source of energy. As the Tesla CEO, Elon Musk had announced that they would start accepting the bitcoins when the cryptocurrency starts using a renewable source of energy, in the same way using a renewable source of energy that is not harmful to the environment should be used.
As electricity is generated mainly through the burning of coal, it releases a huge amount of CO2 into the atmosphere so it is suggested that bitcoin miners should resort to another sustainable source of energy.
How much electricity does a Bitcoin transaction use?
Bitcoin currently consumes around 110 Terawatt Hours per year
Why does Bitcoin use so much energy?
As Bitcoin gained popularity more miners started mining in it, which increased the computing power required to crack bitcoin.
How much does it cost to mine 1 Bitcoin?
The cost to mine one BTC is 8206.64$.
However, another important fact to be noted is that the energy consumed by the unused home appliances in the United States would be enough to power the bitcoin mining for a year. The major energy consumption in most of the countries is due to the unused home appliances.