Business

Bitcoin’s Dark Side. Truths that are hiding for their own profit!

For the miners of California in the 1860s, the desire for rapid enrichment made them indifferent to the environment. They destroyed large areas of land, contaminated streams and rivers, leaving behind the landscape of destruction. Today, 150 years later, modern miners from Silicon Valley also leave their own dirty traces.

The digital Bitcoin, the price of which was recently launched at $ 17,000, has repeatedly been the subject of debate because of its astronomical energy consumption. And as it is known, electricity is largely produced by the burning of minerals such as coal, as it does for environmental pollution by combustion gases and carbon dioxide.

Bitcoin critics consider the virtual currency dirty, for the simple reason that their creation process, so-called mining, consumes enormous amounts of energy from computers. Since the bitcoin value has risen tenfold by 2017, the Digiconomist digital analytics site calculates its annual electricity needs at around 32 terrawatts, as well as the energy needed by a small state.

Digiconomist is not the first to make such comparisons. The 2014 mathematicians at Maynooth University have compared the energy requirements of Bitcoins with those of Ireland. In the calculations that have been attempted to date, estimates diverge.

The fact is that it is difficult to estimate the energy consumption required by Bitcoins because there is no central supervisory authority. Almost all those who invest in bitcoins – and not governments or banks – use special computers to create virtual coins. These supercomputers process and try to solve highly complex algorithms, a kind of puzzle. The solution of the puzzle is then verified and finally allows for the creation of new bitcoins.

The amount of energy required depends mainly on two factors: the complexity of the algorithm and the performance of the computers used to process them. Digiconomist analyst Alex de Vries is convinced that it is simple to figure out a low energy consumption by dividing the total power of the Bitcoins network computers with the power of the most efficient computer.

Thus, in his opinion, the average energy requirement of each Bitcoin computer can be estimated. A relative analysis of DW resulted in an appreciably lower estimate than that of de Bris. “But this method ignores important factors, such as cooling appliances for large companies and older generations of such supercomputers,” said Digiconomist analyst, stressing that “again, it turns out that about 100 kilowatt-hours per transaction is spent instead of 250 kilowatt hours that I have calculated. ”

Every day about 300,000 transactions are made with Bitcoins. In the long run, if you calculate the 100 kilowatt-hours per transaction, the current amount corresponds to half of last year’s electricity consumption in Nigeria.

Whether the amount of electricity consumed for trading and the creation of Bitcoins is equal to the annual consumption of Ireland or half of Nigeria is difficult to verify and estimate with precision. However, many consider the energy requirements of Bitcoins already worryingly high. Although the virtual currency is only eight years old, it already absorbs from 0.05% to 0.15% of the world’s current consumption.