Bitcoins have the ability to entirely change our economy in a number of ways Still, maybe it is time to question if we are ready to welcome the emergence of a technological transformation if it means it has a significant effect on our world
Why is this so? It is because one of the most exciting innovations of the twenty-first century is focused on a very energy-intensive processing method known as Bitcoin mining Welcome back to 'Crypto Geeks' In today's video, we will be looking into Bitcoin mining and how dangerous it is for our environment in-depth, but before we get started, make sure to smash that subscribe button for your chance to win our monthly giveaway Just comment down below" I subbed," and you will be entered in the crypto giveaway, check our "about" to find out what this month's giveaway is! Let's get started The problem is that if you're a bitcoin miner, you have a solid motivation to use a lot of energy
You can simply burn the same amount of energy that the entire Norway consumes and leave no carbon footprint Bitcoin is an effort to create a digital platform only substitute for money in a decentralized manner, with no central bank or authority dictating who owns what or how Is there anything that can deter bitcoin from hitting a new high? Elon Musk and Tesla have recently invested one and a half-billion dollars in cryptocurrencies Undoubtedly, Bitcoin has reached the mainstream, and it is genuinely focused on this method known as mining This supercomputers' primary aim is to check the source of Bitcoin transactions by solving a series of highly complex mathematical equations
99 percent of all Bitcoin mining operations worldwide operate on supercomputers referred to as mining machines connected to the cryptocurrency network It is not necessary to run these mathematical equations to fully validate the origin It has developed into the trusted authentication mechanism for a global cryptocurrency network, ensuring that no one tampers with an international record of transactions Bitcoin basically holds a lottery every 10 minutes for the entire network; you join by performing a very complicated and fully automated task on a computer The only reason you're doing this calculation is to show that you've used some energy in the process
And the fact that you can show you wasted the energy means you've produced something useful in the bitcoin world, known as proof of work When most people think of bitcoin mining, they think of the first prize If you win, you will be paid six bitcoins (approximately £200,000) However, the other award is vital for the network; because now obtain the opportunity to check any transaction that has occurred in the last 10 minutes, ensuring that the network performs essentially as expected Lots and lots of people are mining bitcoins, and random ones win approximately in proportion to how much electricity they use, which is the issue we're discussing
Thus, if a cryptocurrency supercomputer attempts to run these mathematical equations, the one with the best chance of winning the transactions will be rewarded with a small number of bitcoins The faster your computer and the more processing power you have, the more likely you are to win Bitcoin mines So, in order to make as much money as possible from this operation, Bitcoin miners would try to stack up on supercomputers, filling up factories, industrial parks, or even villages with massive amounts of supercomputer processing capacity since the Bitcoin ecosystem is highly resourceful and energy-intensive Utilizing the most recent state-of-the-art cooling and equipment technology, The energy demand is so high that it absorbs up to seven gigatonnes of power each year, or nearly as much Bitcoin transactions on an average use up 21 percent of the world’s energy
While 21 percent of global energy demand does not seem like much, the same amount of electricity can power an entire country the size of Switzerland While a single Bitcoin transaction absorbs the equivalent of 18 US households in a single day; which is absurd A device designed from the ground up to enable people to use approximately 200, 000 pounds of electricity every 10 minutes, which when scaled up is about two and a half times the energy consumption every year by Amazon, Apple, Google, Microsoft, and Facebook combined It also uses almost the same amount of power as Norway, at 120 terawatt-hours However, obtaining such a vast amount of energy is not feasible anywhere
Bitcoin miners aim to keep their costs as low as possible They like to congregate in places with very cheap energy or cold weather because it saves them money on cooling their machines, which gets very hot when they do this pointless calculation Without jeopardizing Bitcoin miners' profit margins, a country with lax environmental standards, abundant resources, and low electricity prices is needed Most miners think of China, which is home to three-fourths of the world's Bitcoin mining operations On the other hand, China relies on one of the world's dirtiest energy sources, coal
However, the network will still use about 29 million pounds of electricity every day That will often result in astronomically high energy consumption And if we keep going at our current rate, if we keep driving Bitcoin mining operations, we may be able to move the world past 2 degrees of warming in the next two decades This is worrying because if we cross 15 degrees Celsius of warming, our global ecosystems' consequences will be devastating and irreversible
Bitcoin supporters have a few points that prove it isn't as grim as it seems The first and most potent defense is to say that much of bitcoin's energy comes from renewable sources According to a recent Cambridge University report, about 39 percent of the bitcoin network's energy is renewable That's very amazing Just a few companies in the world have reached that degree of sustainable usage
However, there are already 61 per cent that are fossil fuels And the fossil fuel industry seems to like bitcoin There have been proposals to install generations of bitcoin mining rigs on flares at methane gas wells, for example The idea is that you will usually only burn the fossil fuel, but now you can make money off it, essentially paying them to stop finding other ways to avoid emitting highly toxic gas Which can have drastic impacts on our environment; accelerating global threats like global warming and ozone layer depletion
The second line of protection is what bitcoin enthusiasts refer to as the stranded generation This is the notion that some of the renewable energy that bitcoin uses might be wasted if bitcoin did not exist There's the China example, which we discussed earlier If you look at Sichuan and Yunnan provinces, you'll find that there's a lot of hydropower that was overbuilt in the last decade, and that's hydropower that would otherwise be curtailed As a result, you can see it being used to mine bitcoin
What is the issue, you may ask? There are two issues The first issue is that we don't know how much-stranded generation exists Still, the second issue is that we want electricity generation to be connected to the grid and available for the most efficient uses that society can put it to You're basically paying someone to keep their stranded assets stranded if you pay them for them It's challenging to look at that and say it's good for the world
And there's a third defense: the statement that dismisses the whole controversy and says, look, it's worth it, and we shouldn't be worrying about bitcoin wasting energy at all After all, many activities use a lot of energy, but we don't think of it as waste Similarly, we agree that people should use electricity for recreational purposes Electricity may be used for commercial purposes Bitcoin is a new disruptive digital asset that we must endorse, but the challenge is that there is an actual size mismatch here
Bitcoin does not depend solely on electricity Bitcoin consumes approximately 01 percent of all energy globally, and it does so for a novel financial system that handles about seven transactions per second solely through visa; which not to mention is highly inefficient and time consuming So, unless there is some unforeseen dramatic reform that drastically reduces the power consumption of the bitcoin network or results in an incredible increase in that network's ability to process transactions, we don't see it as the future of a sustainable financial system Alright, folks, that's all we have time for today! Hope you enjoyed the video
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