The Bitcoin Workload Proof (PoW) Consensus System is an important factor in making this cryptocurrency—and all subsequent cryptocurrencies developed based on Bitcoin—popular. But it is also the source of some environmental controversy, because the calculations required to create blocks and the maintenance of the network have considerable hardware requirements and consume a lot of power.
It's hard to accurately estimate how much power Bitcoin will consume, but two independent indicators—Digiconomist's Bitcoin Energy Consumption Index and Cambridge's Alternative Finance Research Center—are estimated to have reached Bitcoin this summer. Even more than its highest level of energy consumption ever. Despite their differences (Digiconomist is slightly higher), both sides believe that this year's energy consumption peaked in early or mid-July and remained near the historic high of 60-75 TWh per year.
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According to Cambridge, this means that Bitcoin consumes about 0.25% of the world's total energy consumption. From this perspective, if these estimates are accurate, the energy consumption of the Bitcoin network may be equivalent to the entire country of Colombia, with a population of approximately 50 million.
For Bitcoin, this news is a bit embarrassing, because the timing of its peak energy consumption just hits the highest temperature period caused by climate change caused by human activities.
However, the energy consumption of a Bitcoin network is not entirely an indicator of its impact on the climate.
On the one hand, many bitcoin miners come from renewable energy power plants. According to Cambridge, the share of renewable energy may be between 20% and 70% of the total energy consumption of the Bitcoin network. Even in the worst case scenario, when all electricity is generated by burning coal, the bitcoin network emissions are still far less than 1% of global carbon dioxide emissions.
On the other hand, indicators such as this track only the energy consumption of the mining itself and therefore do not take into account other potential environmental impacts. Production and transportation of mining machines also consume energy and generate emissions. In addition, cooling these mining equipment – especially in this hot summer like never before.
While the global community is striving to reduce energy consumption, seeing the energy consumption of Bitcoin soaring to new heights is certainly not an ideal means of publicity. In addition, although still minimal compared to emissions from other activities, we still have to ask, when many blockchains have been able to achieve a secure consensus through PoS, without the need for expensive, energy-intensive Why do we consume so much energy when we mine?
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