Introduction
Energy fuels life. In some cases, it congeals into the familiar forms of our bodies. In others, it congeals into matter in the form of fuels that we burn. Burning that fuel releases the stored energy to drive our economies.
Sustaining our human forms requires a continuous input and release of energy. Society and the people that form it must enact an energy economy proportional to its growth to maintain the world around us. Even perception requires fuel.
One perception humanity creates value. We assign value to everything. We have raised the concept of value to become one of the pillars of society. It is a pillar crucial to our perception of life and well-being. Humanity ascribes value to everything, and the value of that object dictates our generation's behavior. One object humanity centers its existence on is currency. We have held the concept of money near and dear to our hearts for millennia. People engage, join, and kill each other for it.
Power Corrupts
We yearn for power in many forms. I have been taught since my childhood that I need to study and become successful to support my family. In some ways, I have succeeded. I have lived modestly because of the modest opportunities available to me. I wonder, however, if I would be so humble had life provided me a chance for massive wealth. Power corrupts, so perhaps my modesty would fade.
The adage that "power corrupts" is true in more than the philosophical sense. Generating energy needed for society, for example, technically corrupts the landscape from which we draw required resources. The greater the demand for energy, the greater the corruption. Some aspects of society realize this and take action. Should the urgency for wealth sway the emotional intelligence of the masses, however, then the dragon of greed shall slowly feast upon the Earth.
Bitcoin
In 2007, the digital currency known as Bitcoin first came on to the financial scene as a joke or new age fade with a short life expectancy. Currently, Bitcoin is worth trillions and is slowly becoming a staple of modern society. It's a personal viewpoint, not a fact. I feel that something becomes a part of society if it's stable enough to be used anywhere, like, for instance, a stable international currency.
Many countries use Bitcoin, but not as frequently as widely as government-backed money. Bitcoin’s reach will also pale compared to China’s digital currency electronic payment project once it reaches its full potential. However, the cost of creating each Bitcoin may be greater than what society is willing to pay.
In 2017, the Bitcoin Energy Consumption Index estimated that the Bitcoin network would consume more energy than the Republic of Ireland. In 2021, estimates for power consumption could be as high as 184 terawatts per hour. The energy value means that the Bitcoin network energy consumption would be greater than some countries to put this value into perspective. In 2021, power consumption by the world’s top crypto coin placed it at the 34th largest global power consumer between Kazakhstan and the Netherlands.
In Closing
Image by Gerd Altmann from Pixabay
Rising prices of Bitcoin would only serve to increase the network’s power consumption. Currently, it rivals the total power consumed by the world’s data centers combined.
What are your thoughts on Bitcoin and the power consumption that it requires? Is it a non-issue? Does it matter that mining Bitcoin consumes more energy than some countries?
Thank you for reading and following on throughout my Hive journey.
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Several years ago, when I first learned about BTC's energy consumption, I thought it was absolutely ludicrous.
Then, a year or so later, I flipped 180-degrees because I realized it was a type of insurance against a 51% attack. My thinking then was that it would take a computing super-power like the U.S. or China to mount a successful 51% attack.
Now I have flipped back to my original position, because [1] three mining syndicates control over 50% of the hashing power, therefore it is not all that decentralized, and [2] there are now solutions out there that are far more decentralized, fee-less, way faster, and have better safeguards (imho) against malicious attack.
With Elon taking aim at BTC for its energy consumption, I predict either a change to BTC's proof of work algorithm within a year or so (to make it less energy intensive) or more and more celebrities piling on criticism of BTC. Will that criticism be enough to topple BTC from its pre-eminence in the crypto-sphere? I doubt it, but it's hard to say.
Some still argue that all that energy consumption is a genuine safeguard against a malicious attack. I am not convinced that it actually represents the level of safety many claim -- and we will never know how vulnerable BTC truly is until a successful attack occurs, which might come next year, or might be never.
I used to think whatever ultimately replaces BTC will be a hardfork of BTC, because the newBTC would thus inherit the same network effects as BTC -- which would just be too valuable to pass up (and you instantly could have the support (presumably) of all the institutional investors already knee-deep in BTC, because they will have equal shares of newBTC). I still think that is likely, but probably not as likely as it used to be.
Initial Response
Your position isn't unfounded. Working in the power industry, after reading about BTC power consumption, I wasn't surprised. Understanding the base nature of humanity, I felt that value would rise soon. When something comes into popularity, the predators will arise and surround the hunting ground. The observation you made regarding the three syndicates appears similar to my example.
I'm not surprised that there are better alternatives to the BTC process and the POW model in general. It was just a matter of time.
Billionaires
I can't speak for Elon Musk. I am not a billionaire, and I don't know that I will ever have that fortune. I don't have his mindset. When I see someone at his level making statements publicly, I'm immediately suspicious because something like Twitter is just a tool to them. A comment like his reeks of ulterior motive, given that the very nature of Bitcoin is to preserve identity and anonymity. I recommend reading Ms @badbitch's excellent article on Musk's announcement.
In General
I can't comment on energy consumption vs. security. If three entities control most BTC mining, the network is still subject to attack. If anything, the fact the mining process is centralized makes it more prone, in my opinion.
The BTC network will soon come to an impasse I didn't initially consider. I didn't bother to consider power consumption and the publicity on energy consumption for some strange reason. Climate change is a huge deal right now. Maybe 100-150 million people globally are investing in crypto (guess)? The rest of the world either doesn't know or doesn't care. Akin to the myriad of NASA programs that get cut for lack of understanding, I imagine certain governments will speak about the waste of energy consumed by processes like BTC.
If BTC changes and will have to, it will need to adapt to the changing times.
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Thank you very much.
Thank you for your support.
You are welcome!
Energy is our lifeblood and that is true. But once it gets increasingly expensive to generate energy for our consumption, then there is trouble in paradise
It is true that power corrupts, maybe if you had access to lots of power, then your modesty will have fade away
I have no idea why BItcoin decides to be mined at an increased energy level. But I think just maybe they will need to reduce such levels so that the society can be willing to pay for the value it brings
As usual, I enjoy our conversations. Thank you very much for responding again.
The legends
The greater the prize, the more people that pursue it. One classic example of this belief is the United States' California Gold Rush in the mid-1800s. Someone found gold, probably lying right in the street, and legends were born from the discovery. People from across the land and sea sought the fortunes discovered earlier on in California's history.
Fast forward more than 150 years and we're now in a new generation of a gold rush. Instead of metal, we pursue digital coins awarded from solving a math problem. And in the beginning, it was good and legendary. People across the land, sea, and continents looked upon the new system of currency and they too found that it was good. Contrary to the masses arriving within a newly founded state, people instead began to build fortresses to worship the new currency and the promises it gave to the faithful.
Energy Demands
We have greater energy demands from the Bitcoin network because companies have put a greater number of processors out there to mine the currency. One figure I read was that the network mines about 75 BTC/hour. Also, the system is built upon the Proof of Work Model (POW). In a straightforward explanation, the POW model allows for a secure and verifiable transaction without the use of a third party. If one miner solves a problem, that miner is awarded a BTC, all other miners work to verify that transaction to prove the work is valid.
Mining one BTC requires energy in the amount of about 1.57 homes in 2015. The value has risen since. A less energy-demanding form of verification is Proof of Stake which requires less energy. I do not believer BTC will ever implement the POS methodology unless something critical occurs.
I am glad to be among the legends of the digital coin even though I am not part of the legends that discovered gold earlier. I plan to build fortresses with you too, just as you said, and I believe in the promises it brings.
You can never tell what will happen in the future. Maybe, just maybe, something will happen and that will push Bitcoin into implementing the POS. We just have to wait and see, and be ready for the overturn of events.
Thank you for taking the time to explain this @scholaris
I appreciate
You are very welcome! You can't tell what will happen in the future, but you can certainly forecast it with some accuracy.
It's only noticeable to some groups now, but eventually, Bitcoin's power consumption will rise beyond something ridiculous. Either environmental or government groups will start to question it more forcefully. It could be that such attention drives BTC to a hard fork that may need to change its POW mode.
More importantly, will be the cost of a BTC under the POW model. If the net gain gets close to zero between mining a token and paying for the costs, it would have a greater impact on the future of BTC.
Hehhhehehheee...I think I know where this is going and you are not far away from the truth. It will definitely be people trying to question its power that will compel them to change their POW mode. I just hope such a change will be for the best.
I believe power consumption is enough of a hot topic that Bitcoin Miners will switch to Proof of Stake. We're in the era of "Climate Change". No one is immune.
Ethereum is already planning the switch. Bitcoin SUISSE is planning to follow the POS plan once Ethereum makes its official switch to POS.
Thats interesting
Change is upon us then
Thank you for taking the time to explain
.
Cheers