(Psst, secret, not-so-secret!) As energy consumption becomes a bigger and bigger issue, it will become more apparent that PoW (Proof of Work) is not energy-efficient. The reason why this is an issue is that PoW is a highly energy-intensive process that requires a lot of processing power and electricity to run.
PoW consensus protocols are often used in blockchain networks, as they are considered to be cryptographic algorithms that are good at verifying the truthfulness of data. PoW also has the advantage of being computationally expensive, making it harder for an attacker to gain control of a blockchain. However, PoW requires the use of energy, which makes the network vulnerable to attacks. In the case of PoW consensus protocols, the blockchain network can be defeated easily if the attacker controls more energy than the rest of the network. This is why many PoW protocols now require a minimum amount of network power consumption to be able to operate.
The current PoW algorithm, Ethash, is the most widely used algorithm for verifying PoW Bitcoin mining. PoW algorithms use the same hash-function as SHA256. The way Ethash is designed is specifically to make the mining process more energy efficient than the Bitcoin mining process.. Read more about bitcoin mining energy consumption 2020 and let us know what you think.In writing the world’s most famous white paper, Satoshi Nakamoto defined the bitcoin (BTC) mining process. It has been determined that the new coins will be minted by proof of works. To perform this validation and mine cryptocurrencies, computers must solve complex mathematical problems. In the beginning there were only a few miners. But that all changed before the initial emergence of bitcoin. Competition in the mining industry has increased dramatically, leading to a sharp rise in the cost of competitive machinery. More importantly, the demand for energy increased dramatically with the advent of new machines that required energy mainly for processing and cooling. Eight years later, electricity demand for bitcoin mining has risen to 116.71 terawatt-hours per year, according to the Cambridge Bitcoin Electricity Consumption Index, or CBECI. At first glance, it seems like a lot, right? But let’s take a closer look at the data to better understand the true environmental impact of bitcoin mining. Related: Ignore the headlines: bitcoin mining is already greener than you think.
Energy consumption for bitcoin mining
Recently, some social media influencers have linked bitcoin to a perceived increase in the use of fossil fuels, particularly coal. In fact, some countries – China, for example – use coal as a major energy source. But is it the main fuel for the energy used? That’s according to a study published in September by the University of Cambridge: Hydroelectricity was cited as the main source of energy. 62% of Hascher respondents stated that their mining operation is powered by hydroelectricity. Other forms of clean energy (e.g., wind and solar power) are second only to coal and natural gas, representing 38% and 36% of respondents’ energy sources, respectively. The world also produces 25,082 TWh of energy per year, according to CBECI. Only 20.863 TWh is consumed, i.e. 16.82% is wasted. Bitcoin accounts for 0.47% of total energy consumption and only 0.54% of the world’s energy waste. Another study recently published by Galaxy Digital compares bitcoin’s energy consumption to that of banks and gold mines. According to the document, the gold mining industry consumes 240.61 TWh per year and the banking system 263.72 TWh per year. Even more troubling, CBECI points to unused electronic equipment. In the United States alone, the electricity consumed in a year by connected devices that are not in use would be enough to power the Bitcoin network for nearly two years. Thus, it is clear that Bitcoin’s energy consumption is not as large as claimed compared to global energy production and waste. Not to mention that this consumption of approximately 116 TWh is responsible for the security and access to a decent life for millions of people around the world. What you really need to know when talking about green bitcoin is the carbon footprint. Related: Is bitcoin a waste of energy? Pros and Cons of Bitcoin Mining
Carbon Footprint of bitcoin
Unfortunately, much of the energy currently generated results in high carbon emissions, which should be a major concern and focus in the debate about bitcoin’s environmental impact. According to data published by the scientific journal Joule in 2019, bitcoin’s carbon footprint is between 22 and 22.9 tons of CO2. This is indeed a relevant amount, comparable to the issue rates of Jordan or Sri Lanka. But that’s far less than the energy costs of, say, the US military, which emits 59 Mt of CO2, according to Statista. Fortunately, there are simple ways to offset bitcoin’s carbon footprint. With asset tokenization, some companies have decided to tokenize carbon credits, allowing miners and anyone involved in the cryptocurrency industry in any way to reduce the impact caused by the production of electrical energy used in mining machinery. In the future, we need to focus on reducing our use of fossil fuels to reduce our remaining carbon footprint. It should be noted that the environmental problem will not be solved simply by reducing the use of fossil fuels. It is even more important to optimise the use of the energy produced, paying particular attention to the reduction of waste and unnecessary carbon dioxide emissions. Related: Pandemic year ends with symbolic decision on emissions trading
Green Bitcoin Development
Energy consumption related to mining is not expected to increase much in the coming years, as it is more related to computing power than to the introduction of bitcoin itself. It is therefore expected that the figure of 116.71 TWh will remain stable for some time. To achieve the goal of a green bitcoin network, mining companies in the cryptocurrency can contribute by buying carbon credit tokens and encouraging production that uses less fossil fuel. Blaming Bitcoin or miners for the destruction of the environment, while turning a blind eye to the other 99.54% of energy generated, is disingenuous to say the least. Bitcoin is open and can go to the ends of the earth regardless of third party restrictions or prohibitions. It is important to remember that this crypto currency was created to help ordinary and low-income people live a decent life, prevent demonetization, ensure purchasing power and improve quality of life. This article contains no investment advice or recommendations. Any investment or venture involves risk, and readers should do their own research before making a decision. The views, thoughts and opinions expressed herein are those of the author and do not necessarily reflect or represent those of Cointelegraph. Jay Hao is a technology veteran and experienced industry leader. Before joining OKEx, he worked on blockchain-based applications for video streaming and mobile games. Before entering the blockchain industry, he had a solid 21 years of experience in the semiconductor industry. He is also a recognized leader with a proven track record in product management. As CEO of OKEx and a strong supporter of blockchain technology, Jay predicts that blockchain technology will remove barriers to transactions, increase efficiency and ultimately have a major impact on the global economy.Ethereum is a decentralized computing platform that supports smart contracts, cryptocurrencies and the blockchain. If you have been following Ethereum for a while, you might have heard about the Casper update. This is a major update that is designed to allow the Ethereum network to run more efficiently and scale to meet demand.. Read more about blockchain energy consumption and let us know what you think.
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