New research by the Dutch financial institution ING shows that the exponential expenditure of energy consumption demanded by the creation of the most acclaimed cryptocurrency of the moment, bitcoin, could kill its success and is intrinsic to its survival.
The report, produced by Teunis Brosens, ING's senior economist, based on data from the web digiconomist, indicates that this energy is around 200 kWh. In fact, the developer community must check that the operations are real, credible and that there is no deception. For proper verification, a large number of computer checks and connections between different computers are required, as indicated this Saturday by the Spanish news agency "La Vanguardia".
As demand for bitcoins grows, the creation and verification operations multiply. A few days ago, Christine Lagarde, president of the International Monetary Fund (IMF), warned that creating bitcoins already consumes as much energy as Argentina. And according to the data managed by the World Economic Forum, the energy needed to create bitcoins grows at an average of 25% per month.
With these projections, the figure is that in 2020 the creation of bitcoins could require all the energy consumed worldwide. This does not appear to be a very sustainable situation either ecologically or financially.
Source: www.hispantv.com
Let the FUD begin. How much does it cost to print fiat? Whats the intrinsic value? To ask the same questions - How much does it cost to create bitcoin? What's the intrinsic value? Some food for thought. Staking and Proof of Stake is a great way moving forward, however I do like the fact BTC is Proof of Work and hope it remains that way for this coin in particular.
The report by digiconomist has been criticized and critiqued over its accuracy. Nonetheless, this is a matter that should be taken seriously and I don't believe it is FUD. As a true believer in Bitcoin and cryptocurrencies, I believe this is a problem that needs to be solved no matter the accuracy of digiconomist. Whether it is completely accurate or not, the energy used to min bitcoins is too much. Recently, they did an experiment in Canada trying to use hydro power, but it didn't work. The mining farms needed too much energy.
Bitcoin won't be sustainable if it is using this much energy. A project like Cardano or IOTA will pave the way. Proof of Work might be taken over my Proof of Stake. Again, this is not FUD. This is just a supporter of Bitcoin acknowledging a potential problem to future success.
Other solutions include countries moving to renewable energy altogether. This will be necessary with or without cryptocurrencies.
Thanks for your article.