Why the power consumption of bitcoin is problematic

Why the power consumption of bitcoin is problematic

Among the controversies surrounding the growing popularity of bitcoin, that which affects energy consumption seems to br the most critical because, as much by the seriousness of the subject as the lightness with which many observers dismiss it, it poses a real threat to the very future of cryptocurrency.

The current situation should already be enough to raise the indignation anyone with the slightest environmental sensitivity: that the estimate that Bitcoin network operations absorb the equivalent of Morocco’s electricity consumption is fair or overestimated, the only idea that a financial instrument with virtually no economic function (to date ) other than speculation is an energy chasm is a serious issue. Even for this role, other media would be more appropriate.

Image result for bitcoin electricity

However, independently of the usual drift from the initial ideal of a system of “electronic cash” inscribed in its founding text , recent developments tend to show an intrinsic defectto bitcoin that, unfortunately, many of its defenders refuse to admit: in all likelihood, without a radical change in approach, its success can only be accompanied by a growth in electricity consumption, incompatible with the stakes of the 21st century.

To understand the reasoning, just go back to basicscryptocurrency. Let’s start by reminding ourselves that the computer network that manages it consists of a multitude of independent machines which, thanks to more or less complex and energy-consuming calculations (the so-called “mining”), guarantee the immutability of recorded transactions. , for a fee which takes, inter alia, the form of a commission. All the rest is business, classic, supply and demand …

Thus, the popularity of bitcoin logically tends to increase the number of operations. However, the technology used introduces a structural limit to the amount of transactions that can be recorded during a given period (and even if the parameters were changed, there would always be a cap). Consequently,between the participants, which is naturally resolved by a tariff increase: the commission to pay to validate a transfer increases .

Inevitably, this inflation attracts suppliers : the “mining” becoming more and more profitable, it is obviously tempting to deploy more and more machines on the network to capture this financial windfall. It should be noted at this point that the number of compute nodes is also an important factor in the confidence that can be given to bitcoin because it determines the power threshold that should be implemented to “hack” the system. The higher the sums circulating, the higher this level must be to discourage potential fraudsters (who could be states).

Image result for bitcoin electricity

These are two fundamental reasons that justify a spiral of computing power and associated power consumption, which it seems difficult to leave without questioning the principle of bitcoin. In particular, the ” proof of work ” mechanism (in this case, the work of calculation) is at the heart of the imperfection and no alternative today seems to offer a robust and effective answer. Anyway, it is imperative to stop believing that the problem will be solved by itself!

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