The value of Bitcoin has kept increasing since it was introduced in 2009. A single Bitcoin almost reached $10,000 last week and was worth close to $12,000 during the weekend.
Bitcoin mining operations are causing electricity blackouts in countries that are finding it difficult to keep up with the energy demand. A typical example is Venezuela where a great number of its citizens are delving into mining Bitcoins. The country is going through a financial crisis and people need to find different means to sustain themselves. According to experts, mining operations use up to 31 terawatts-hours annually which can power more than 159 different countries.
Digiconomist recently revealed that each Bitcoin transactions need the total amount of energy that will power nine homes in the US per day. The Bitcoin mining sector supports anonymous transactions, making it possible for anyone to make or receive payments online. After buying the cryptocurrency, it can be converted into other currencies or used as a means to purchase goods and services.
The process of producing more Bitcoins is known as ‘mining.’ It basically involves using computers to solve complex math problems in order to determine whether a block of Bitcoin transaction is authentic or not. These problems are getting complicated every day, resulting in the installation of more computers with high-performance GPUs. Various users network together so as to complete millions of calculations every minute.
Apart from causing blackouts, some countries are battling with high carbon footprints. This has thwarted the effort to start using renewable energy sources instead of fossil fuels. Affected countries like China depend on coal-fired power plants as their primary source of energy. Over half of Bitcoin miners reside in the country with a facility that comprises of 25,000 computers. Around $40,000 worth of energy is consumed by these computers each day.
According to let’s go bitcoin blog It has been predicted that Bitcoin’s energy demand will be far greater than what is currently available. There are speculations that it will use the same amount of energy needed by the entire world come 2020.
The alarming rate at which Bitcoin mining is using up energy needs to be addressed. Truth be told, energy is also needed to run businesses and homes. It has been suggested that coin owners should start adopting Proof-of-Stake for validation instead of the popular Proof-of-Work mechanism. The latter is very expensive, while the former will help in reducing the levels of power usage. Other solutions include launching of the Lightning Network and the release of sophisticated energy-efficient technologies for handling mining operations.