It is high time we start paying attention to Bitcoin’s large carbon footprint and the effect it has on the environment.
If you have been shying away from cryptocurrency till now, then you really need to have a rethink as the world is tilting beyond the use of fossil fuels.
Had you made an investment in Bitcoin a few years ago, it is now considered a goldmine. The surge in the price of Bitcoin has attracted a lot of interest in cryptocurrency, a hype only equaled by the “.com” boom of the late 90’s.
Imagine in 2011 you invested $100, by now the net worth of your investment would be tilting towards $4 million. A lot of people are currently biting their fingers because they couldn’t invest in Bitcoin earlier. Although Bitcoin was intended to replace fiat-based currency, right now it is seen as an instrument for investment.
Despite all the noise about Bitcoin, what we may not understand is the energy the bitcoin network consumes during the mining process and the impact it has on the environment. The bitcoin network is actually a heavy consumer of fossil fuels, indirectly so to speak by utilizing amounts of electricity equivalent to an entire city. ,
Do you know that the rise in Bitcoin is occurring at a period the human race is so many years behind schedule on how to effectively manage the impact of climate change? In this era of global warming and environmental activism, bitcoins utility versus climate impact could really be brought into question, and here are some examples to consider:
-About half a million Canadians use the equivalent of what bitcoin uses daily
-The entire country, Democratic Republic of Congo, uses less energy than bitcoin
-It takes nearly 6 U.S. Aircraft carriers to use as much energy as bitcoin in a day
-The energy consumption of nine different homes in the United States is equivalent to the energy requirement of each bitcoin transaction
-As of today, the bitcoin network draws a combined computing power that is 100,000 times higher than the value which 500 supercomputers would draw
The energy requirement of Bitcoin is estimated to be around 31 TeraWatt/hr each year. However, over 150 countries consume less than this figure annually. At this point, if we classify the bitcoin network as a power-hungry network, then we won’t be out of place. The power requirement of the network is on the increase on a daily basis. For instance, in Haiti, the yearly consumption of power stands at 450 Gigawatt-hours, this is the same figure the power-hungry network consumes on a daily basis.
So now upon us is the real-world price that is associated with digital financial transactions – a huge computing power demand. And with the continue growth of Bitcoin, so grows the difficulty in the mathematical problems being solved by miners computers -a concept introduced to ensure the control of Bitcoin in circulation. So basically we can assume that as the “difficulty” to mine bitcoin increases, so does the necessary CPU power. The difficulty is a mathematical calculation that grows increasingly more complex with the mining of each bitcoin block, and how many hashes are required for miners to validate a block. Let’s simplify this statement: at the current growth of bitcoin, there will arrive a time when the use case benefit versus the adverse climate impact will be at odds, and sensibility to mine more would be off the table.
Even Roger Ver, the best known ambassador of Bitcoin since the very most early days, has publicly stated that he is now leaning towards a preference of Ethereum instead of Bitcoin as a viable use of value exchange, as well as also preferring bitcoins’ hard fork “bitcoin cash”, both of which have more scalability.
Since the power requirement of cryptocurrency is hampering its revenue base, Ethereum co-founder, Vitalik Buterin, recently revealed that the company would soon launch a hard fork that will change its network to “proof of stake” from “proof of work”. If these plans by Ethereum sail through, then a lot of miners on the Ethereum network will lose their job.
As at today, a lot of efforts are in place to reform the transaction process of Bitcoin, with the intent of reducing the heavy environment impact and sophisticated power requirement required for each new coin to be created.