Bitcoin Mining Activities Account For Over 1% Of The World’s Energy Consumption
In order to protect the blockchain and create more Bitcoin it is necessary to mine Bitcoins. This is a process that requires important amounts of electricity, and this can be a very big problem for companies involved in these operations.
Indeed, it is not an energy-efficient procedure. But how to make Bitcoin mining more energy efficient?
According to Arvind Narayanan to the Senate Committee on Energy and Natural Resources, everything what is done to make cryptocurrency mining hardware greener is ‘a drop in the bucket compared to the overall network’s flabbergasting energy consumption.’
He told the committee that if the price of cryptocurrency goes up, more energy will be used. The same happens if the price goes down, less energy will be used. Increasing energy efficiency has no impact on energy consumption, says Mr. Narayanan.
Indeed, he mentioned that Bitcoin mining is using 5 gigawatts of electricity each day. That means that energy efficiency will no be helping in this task. Just to put it into perspective, Bitcoin’s POW mechanism (Proof of Work), consumes a similar amount of electricity like Switzerland, a rich European country with an important population.
It is important to mention that banks and other traditional financial institutions consume almost three times more energy than Bitcoin.