Dozens of power plants were knocked offline, causing billions of dollars in property damage, and some retail customers were presented with monthly bills as high as $17,000. To see how green bitcoin can be, look no further than the Lone Star State, whose independent power grid famously failed during last winter’s deep freeze. Ted Rogers, Vice Chairman of Greenidge Generation Holdings “If you think bitcoin is fake money, then any amount of energy use will be too much.” “But bitcoin is not going away, and it is going to be the global reserve currency and the center of the future financial world.”
“If you think it’s fake money, then any amount of energy use will be too much,” observes Ted Rogers, vice chairman of Greenidge Generation Holdings, which operates a power plant and bitcoin mining facility on Lake Seneca in upstate New York. (Backers say a new Lightning transaction network designed to operate atop bitcoin could make it even more efficient than Visa.) Registering a transaction on the bitcoin blockchain takes a million times more energy than processing one on Visa’s bank network. Its algorithm forces miners to compete to unlock each new coin, and that competition will continue until the last bitcoin is mined, sometime around 2140. (Ether, the second most popular, has a market cap of $250 billion.) And bitcoin mining is unlikely to get much less energy-intensive. Its first-mover advantage has translated into a recent market cap of $700 billion, more than the five next most valuable cryptocurrencies combined. There’s even a new currency, candela, whose protocol requires solar-powered mining.īut bitcoin isn’t going anywhere. Ethereum, for instance, is transitioning next year from “proof of work” to a system called “proof of stake,” which cuts energy use by 99.95%. There are serious cryptocurrencies, including ethereum, cardano, stellar, Ripple’s XRP and algorand, which use vastly less energy than bitcoin or are being modified to do so. Of course, the system could have been designed differently.
When Bitcoin peaked at $64,654 in April, its network was wasting enough energy to keep the lights on in all of Georgia. TERAWATT TERROR As Bitcoin’s price rises, so does the amount of energy consumed by its worldwide network, as more “miners” jump in with their high-powered computers to solve mathematical problems. The utility of the exchanges made possible by bitcoin will far exceed the cost of electricity used.” I think the case will be the same for bitcoin. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. The marginal cost of gold mining tends to stay near the price of gold. In a 2010 message board comment, Satoshi Nakamoto, the pseudonymous creator of bitcoin, made no apologies: “It’s the same situation as gold and gold mining. This “proof of work” is simply a way to create artificial scarcity, making it far too expensive for any one group to corner or manipulate the market.
Sure, some portion of the electricity is used to validate transactions, but much is seemingly wasted solving flat-out useless mathematical problems. It’s especially frustrating that high-energy inputs aren’t a bitcoin bug but rather a feature. To unlock a single bitcoin, miners must feed their machines about 150,000 kwh, enough juice to power 170 average U.S. Exactly how much carbon is released into the atmosphere by bitcoin mining depends entirely on what energy source is used. New York City runs on just 6 gigawatts, the nation of Belgium on 10. Depending on bitcoin’s cost (a higher price attracts more miners), its global network sucks up between 8 and 15 gigawatts of continuous power, according to Cambridge. Courtesy of Riot Bklockchainįor all bitcoin’s purported benefits, it’s also clear that the currency is an environmental disaster. The Belly of the Beast: At Riot Blockchain’s bitcoin mining facility in Rockdale, Texas, exhaust from some of the stacks of 120,000 energy-sucking computers pushes the temperature up to 130 degrees.