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Wednesday, June 16, 2021

BitCoin: the risks of insane energy consumption

The advent of blockchain and crypto-currencies, particularly BitCoin, poses real questions of power consumption. In the era of energy efficiency, sobriety and the energy transition, are such innovations really going in the direction of history?

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Kamal Saini
Kamal S. has been Journalist and Writer for Business, Hardware and Gadgets at Revyuh.com since 2018. He deals with B2b, Funding, Blockchain, Law, IT security, privacy, surveillance, digital self-defense and network policy. As part of his studies of political science, sociology and law, he researched the impact of technology on human coexistence. Email: kamal (at) revyuh (dot) com

Will BitCoin be sealed by its power consumption? The question is worth asking, and is valid for all technologies based on the blockchain. Blockchains, of course, offer a decentralized and tamper-proof control tool that has the potential to revolutionize many industries and to make significant savings.

A fantastic computing power to support the development of a blockchain

But the more a blockchain grows, the more computing power needed to add new nodes or new transactions. The BitCoin is an excellent example of the possible drift of the blockchain, because it is the project currently the most developed.

Again, this is not about minimizing the benefits that cryptocurrencies can offer. But to note, simply, that the mining of new transactions in BitCoin requires more and more computing power, and therefore energy. Its carbon footprint is becoming a real global problem. In 2018, it was estimated at 22 megatonned of CO2.

BitCoin consumes 0.21% of the world’s electricity!

One year after the alarm signal from Alex De Vries and his team, a new calculation tool has just been presented by the prestigious University of Cambridge. It measures the amount of electricity needed for the BitCoin’s operation, its carbon footprint, but also a comparison with other financial transaction methods.

And the results are really alarming. The University tool calculates that in June 2019, BitCoin alone used 0.21% of the world’s electricity. Or the equivalent of 7 nuclear power plants.

To arrive at this total, Cambridge researchers added the consumption of all the computers and servers doing mining in the world – based on the number of transactions carried out.

BitCoin consumes more than conventional finance, with 5,000 fewer transactions!

With its 100 million annual transactions, BitCoin consumes more than the entire conventional financial industry, which manages about 500 billion transactions a year – 5,000 times more. Worse: these figures concern only BitCoin, not all crypto-currencies. In a way, the relative stagnation of BitCoin’s development since mid-2018 is excellent news for the global energy balance.

These questions arise in a context where the energy expenditure of data centers is slowly starting to be pointed out. The advantages offered by the multiplication of data and their treatment are beginning to be related to their energy costs.

Cryptocurrencies: from regulation to boycott?

But in the case of BitCoin, the benefits are not even consensus yet. Some believe that a decentralized payment source represents a risk to the financial sovereignty of states, and is an open door to money laundering. Admittedly, the crypto-currencies started from a laudable intention, but that their explosion tends to mislead. All with an energy bill simply insane.

If BitCoin (and equivalent) were to recover, what impact would it have on global power consumption? At a time when states are wondering how to regulate this currency obeying no rule, the question of its necessity and its environmental impact must arise. Until considering boycotts? For the good of the planet, the option is not to be dismissed in principle.

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