Sep 23, 2021 | Shaoni Ghosh
Cryptocurrency is a form of digital currency that possesses true value, like Bitcoin. Bitcoin is one of the most prominent cryptocurrencies and can be considered as the 'king of cryptocurrencies'. It consumes a staggering quantity of power.
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The process of generating Bitcoin uses around 96 terawatt-hours of power each year, which is more than the Philippines, which has a population of 110 million people. In only the last five years, that use has risen tenfold, accounting for over half of all power consumed worldwide.
Banks, credit-card networks, and other intermediaries can regulate who can use their networks. This implies that if one sends someone a large sum of money, the former's bank may disclose it to the authorities.
As an incentive for participating in the management of this massive, spreading, electronic ledger, new bitcoins would be generated. The assumption was that bitcoins would gain value as demand grew over time. A single bitcoin is currently worth almost $45,000.
It takes a lot of computer power to manage a digital currency of that amount without a central authority.
The Bitcoin network must first validate the transaction, or any trade of Bitcoin for that matter. This is where a large portion of the electricity is used.
The more computer processing power one is in possession of, the more rapid predictions one can make at any given time. So, unlike in a casino, one may have lots of computers making a lot of predictions at the same time.
Mining entails making educated guesses and utilising massive computational resources. The winner of the guessing game will get 6.25 newly minted bitcoins, each valued at over $45,000.
According to researchers at the University of Cambridge who have been following Bitcoin mining, China's share of global Bitcoin mining fell to 46% in April from 75% in late 2019. The United States' mining stake increased from 4% to 16% within the same time period.
Wonder how sustainable energy sources, such as wind, solar, or hydropower, are being used to mine Bitcoin?
Bitcoin's usage of renewable energy is estimated to be somewhere between 40% and almost 75% globally. However, utilising renewable energy to fuel Bitcoin mining means that it won't be accessible to power a house, a factory, or an electric car, according to experts.
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Excess natural gas from drilling sites might lead to greater drilling in the future. The extra electricity generated during the rainy season is also claimed by miners. During the dry season, however, the miners would largely use fossil fuels.
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According to The Economic Times, what began as a forward-thinking digital money has already had real-world consequences, which are continuing to grow. Bitcoin mining is tied to the real world of fossil fuels, electricity grids, and pollution, even if it doesn't require pickaxes and hard hats.