Cryptocurrency News

Impact and importance of energy use for PoW

When writing the world’s most famous white paper, Satoshi Nakamoto defined bitcoin as (B T c) mining process. It was established that the minting of new coins would take place through proof-of-work. To perform this verification and be able to mine cryptocurrencies, computers would need to solve complex mathematical calculations.

In the beginning, there were not many miners. However, this changed before the first bitcoin bull run. Mining competition skyrocketed, leading to a sharp increase in the cost of machines capable of competing. More importantly, energy demand exploded with new machines – which primarily needed energy for processing and cooling.

After eight years, the demand for energy for bitcoin mining has increased – and today reaches 116.71 terawatt-hours per year, accordingly For data from the Cambridge Bitcoin Electricity Consumption Index or CBECI. At first glance, it seems like a lot, doesn’t it? But let’s take a closer look at the data to gain a better understanding of the real impact bitcoin mining has on the environment.

related: Ignore the headlines – bitcoin mining is already greener than you think

Energy use in bitcoin mining

Some influential people have recently appeared on social media and are linking bitcoin with a perceived increase in the use of fossil fuel energy, particularly coal. In fact, some countries – such as China – use coal as an important source of energy. But is it the main fuel for energy?

according to a study published By Cambridge University in September:

“Hydropower is listed as the number one source of energy, with 62% of surveyed hashers indicating that their mining operations are powered by hydroelectric power. Other types of clean energy (such as wind and solar) are coal and coal. Natural gas follows and follows, accounting for 38% and 36% of respondents’ electricity sources, respectively.

Also, according to CBECI, 25,082 TWh of energy is produced annually in the world. Only 20,863 TWh is consumed, i.e. 16.82% is wasted. Bitcoin represents energy expenditure of 0.47% of the total energy produced and only 0.54% of energy waste worldwide.

Another survey recently released by Galaxy Digital Compares the energy use of bitcoin For banks and gold mining use. According to the document, the gold industry uses 240.61 TWh per year, while the banking system uses 263.72 TWh.

Even more worrying is the fact that CBECI reports about unused electronic components. In the United States alone, with the electricity spent in a year by connected devices that are not in use, it would be possible to feed the bitcoin network for about two years.

Therefore, it is clear that the energy consumption of bitcoin is not as relevant as has been said in comparison to global energy production and waste. Not to mention that this consumption of around 116 TWh is responsible for providing security and access to a dignified life for millions of people around the world.

All we really need to be aware of when it comes to bitcoin being green is that it has a carbon footprint.

related: Is bitcoin a waste of energy? Advantages and disadvantages of bitcoin mining

bitcoin’s carbon footprint

Unfortunately, most of the energy currently generated results in high carbon rates, and this should be the main concern and focal point when discussing the environmental impact of bitcoin.

according to statistics released In 2019 by the scientific journal Joule, the carbon footprint of bitcoin is between 22 and 22.9 metric tons of CO2. This is actually a relevant amount that is comparable to the emissions rates of Jordan or Sri Lanka. However, this is significantly less, for example, compared to the energy expenditure by the US military, which according to statistics compiled By Statista 59 Mt emits CO2.

Fortunately, there are simple ways to offset the carbon footprint left by bitcoin. As with the tokenization of assets, some companies have chosen to tokenize carbon credits, making it more accessible to miners and everyone involved in the cryptocurrency industry in order to reduce the impact caused by the production of electrical energy used in mining machines. has become easier.

Looking ahead, our focus should be on reducing the use of fossil fuels, with the aim of reducing the remaining carbon footprint.

It is worth noting that simply reducing the use of fossil fuels will not solve the environmental problem. it’s even more important Customization Use of generated energy while focusing on reducing any waste and unnecessary carbon emissions in the process.

related: Epidemic ends the year with a promising carbon cap-and-trade solution

green bitcoin development

It is not expected that energy consumption by mining will increase much in the coming years, as it is more tied to computing power than bitcoin adoption. Therefore, 116.71 TWh should remain stable for some time.

To achieve the goal of a green bitcoin network, crypto mining companies can do their bit by purchasing carbon credit tokens and emphasizing production with less use of fossil fuels. It is unfair – to say the least – to accuse bitcoin or miners of polluting the environment, while turning a blind eye to the other 99.54% of the energy generated.

Bitcoin is open and can go to the ends of the earth, regardless of restrictions or restrictions imposed by third parties. It is important to remember that this cryptocurrency was created to provide a dignified life to ordinary and underprivileged individuals, prevent depreciation of money, guarantee purchasing power and improve the quality of life.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, so readers should do their own research when making a decision.

The views, opinions and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

jai hao is a technology veteran and experienced industry leader. Prior to OKEx, he focused on blockchain-powered applications for live video streaming and mobile gaming. Before entering the blockchain industry, he had a solid 21 years of experience in the semiconductor industry. He is also a recognized leader with successful experience in product management. As CEO of OKEx and a strong believer in blockchain technology, Jay expects the technology to eliminate barriers to transactions, increase efficiency, and ultimately have a substantial impact on the global economy.