Bitcoin Massive Energy Consumption- Explanation and solution
From last few months Bitcoin is the most popular cryptocurrency, its price has increased more than $19000 in just 1 Months from $8000, and cam down below $9000 in again 2 months from $19000 resulting in more than 55% drop in prices. Large number of cryptocurrency mining farms are open with price increase.
Bitcoin is the world first cryptocurrency and worldwide payment system. Bitcoin is the world’s first decentralized digital currency. Whole System works without any central bank. Not monitored by any single administrator, owned by many individuals and companies.
New bitcoins are generated by a competitive and decentralized process called “mining”. This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.
Each Solved block generates bitcoin to miner wallet. User gets bitcoin block reward for block solve. The generated bitcoin is transferable to any bitcoin wallet.
The owner of a bitcoin transfers it by digitally signing it over to the next owner using a bitcoin transaction.
Bitcoin Miners Process bitcoin transfer. They verify and safely process the transfer of bitcoin and in return they get the transfer fees and few bitcoins. Bitcoin transactions use SHA algorithm for security.
Large and Heavy Processors support Bitcoin generation and transfer, consuming huge electricity.
Anyone can mine bitcoin, you just need a good processor or mining device, more high hashing power your mining device will have more bitcoin you can mine.
As bitcoin price has increased to more than $9000 more and more miners are now adding more mining machines, Which uses lot of energy and it is still profitable to them. According to the latest reports shocking 250 kilowatt-hours (KWh) is being used by miners for each Bitcoin transaction and there are about 3500 bitcoin transactions per day, Each Bitcoin transfer uses that much of energy which is good to run an average American household for 1 day.
If we calculate worldwide energy consumption of bitcoin mining it comes to over one gigawatt, Which could power the daily needs of over 800,000 American Homes.
If we minimize the electricity loss and assume about the economic incentives which are available to bitcoin miners at a given price level, Despite this the minimum level of 75KWh / transaction will be a problem and at the actual 215KWH its a very big problem.
According to one estimate the Bitcoin mining network consumes more energy than as much energy needs of Country Denmark.
- Make the payment to any person in the world without the interference of any third person.
- There is no central authority who controls the bitcoin, you are the owner you can sell your bitcoin at any rate you want.
- Bitcoin transaction is very safe, almost impossible to hack
- Payment processing takes bitcoin wallet address
- Information is transparent, transaction information is visible to everyone.
- Low fees as compared to other cross border payment solutions.
According to the statics of energy consumption bitcoin network is consuming huge amount of energy even for 1 bitcoin transaction I won’t suggest to use it in the way it is. Other disadvantages are:
- Most of the people are unaware of what bitcoin is and not accepting payments in bitcoin
- Its price is highly volatile, its price keeps on increasing and decreasing.
- It is still in development mode, new features are always coming.
- Lot of energy consumption.
- A few number of people own huge amount of bitcoin, so they can control the price of bitcoin.
Here are few solution through which we can save the energy consumption rate.
- Bitcoin price is too high, reducing the price of bitcoin will reduce the difficulty of hash rate and the energy consumption will reduce.
- Bitcoin 12.5 block reward must complete soon than scheduled reduction 2020.
- Changing the mining process, changing the algorithm.
- Using Ethereum algo which uses less energy than Bitcoin.
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Published at Fri, 01 Nov 2019 13:50:28 +0000
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