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Crypto Mining and Energy Consumption

Energy

August 8, 2020 | 

JOHN K MWANIKI |  1 Comments| 

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The crypto effects on the world are enormous. It has revolutionized the banking and global transactions. It also ensures faster cross-border transactions. And there is more to come. At the same time, energy consumption has been an issue. 

Crypto mining is energy-intensive. Reports indicate that it consumes more energy than around 159 countries. Such high-level consumption is a threat to the world and its sustainability. 

Here is all you need to know about crypto mining and energy consumption. 

Why Crypto Mining Needs So Much Power 

Most people don't understand why crypto mining would need so much power. They believe anything already available electronically should be power minimal. Crypto mining, however, is so power-intensive. It involves the "proof of work" system in extraction and verification. Several miners work at the same time to verify transactions. 

Mining is such that several people are looking to solve the same puzzle. The one who solves it gains the rewards. There is no limit to the miners allowed at a time. It means several miners work at the same time from anywhere in the world.

They all provide different data at the same time as it involves guesswork. The processing needs a lot of computing power. The higher computing power, the more energy consumption.

A single Bitcoin puzzle takes around 10 minutes to solve. Every time a miner joins the platform, it becomes harder to solve the puzzle. The lucrative nature of Bitcoin means miners always want to join.

Bitcoin has been reducing miners through halving. It is where it reduces the amount of reward for the puzzle solved. The method is a way of preserving the coin's quality. Fewer miners lead to lesser coins available in supply. Bitcoin works with the laws of demand and supply hence an increase in value.

It seems like halving also helps in managing energy consumption. 

Still, there is a concern about the hardness of solving the puzzles. The more Bitcoin becomes popular, the harder it becomes to solve. Once it is harder to solve, miners need more data. These, in turn, increase computing power and the energy required

The whole debacle leads to the question of sustainability.

Crypto Mining Sustainability 

The high energy consumption by Bitcoin mining means it's a threat to its existence. Studies have shown that if such levels keep on, it might finish up all the power available. Experts are looking for ways to keep the sector alive while managing consumption. 

The first possible option would be to use less powered machines. However, that is not competitive enough. The miners need potent machines to solve the algorithms faster. The use of more powerful devices leads to a sustained increase in energy consumption. 

Still, there are other ways to help reduce the energy concerns. The best power source to consider would be going green. The sector needs to look for ways to make money possible using green energy. Already, Canada has been fronting the use of green energy to attract miners.

Miners like Genesis Mining have already adopted solar-powered mining. Iceland based company is one of the largest in the world. Adopting clean energy is an indication of the future of mining. 

Some factions insist green energy is not the solution. This group believes the available green energy cannot power the possible output. They are instead routing for tweaking in the mining mechanism. They advocate for a "proof of stake" instead of a "proof of work" validation. 

The change in the validation cuts energy use by 99.99%. It eliminates the need for powerful machines. Neither does it need several data. However, it comes with multiple challenges. The change in the system requires several upgrades.

These can be time and money intensive. Still, cryptos like Ethereum are seeking to change validation in the new version. Meaning the change is possible. 

Bitcoin and Climate Change 

Any process that comes with carbon emission brings climate change into focus. Several research findings on Bitcoin have had varying results. One study claimed that Bitcoin alone would push global warming by above 2%. The studies show that mining is a wasteful use of energy. 

Subsequent reports have had different results. They claim the impact of Bitcoin mining on the environment is minimal. In contrast, the earlier studies relied on country-specific; the other use a global viewpoint. Any review that uses a smaller control measure is biased.

Even in China, there are discrepancies with the results. For example, the emissions at Inner Mongolia vary with those at Sichuan. These places rely on different power sources hence the variations. 

The amount of carbon mining releases also varies in the new study. While in the earlier report it was 63 megatonnes, the latest research makes it at 17.29. Still, China is the leading country in emissions. It accounts for 47% of the world's total carbon emissions. 

Still, the finding means the world should stop worrying about Bitcoin. The miners and the world over still need precautions. There is a need for more green energy in crypto mining. 

Some believe the Bitcoin-climate issue is more human than crypto. That it is the humans who have failed to adopt clean energy quickly. Most argue it's the role of the governments to control mining.

The governments who are part of the Paris Agreement need to observe climate control. Still, there are roles for both parties. The government controls crypto adoption while crypto companies limit miners. 

There is more to look out for in the relations between crypto and climate change. The fight for environmental conservation has been intensifying. Even the least amount of emissions is a concern in the current world status.

The Chinese government has already banned Bitcoin mining. The People's Bank of China is also looking for ways to manage emissions. 

Bottom Line 

Crypto energy consumption is a grave matter in the world. While the world can do with the benefits of crypto, the environment is also essential. For that, there is a need for energy consumption control. Adopting green energy, for now, seems the best alternative. 

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batholomew brown
batholomew brown . I’m a bitcoin trader and the time I’m writing this blog I can’t find a single review about many bitcoin trading signal services and companies. I have lost lots of money testing them for over an year. I don’t want you to be scammed too.

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