What is Bitcoin Mining environmental impact? How do Bitcoin miners mine Bitcoin? How bad really is the emissions and profit line these days?
Depending on the person or the CEO, Bitcoin mining and its environmental impact are either nonexistent or the most harmful thing since the atom bomb. Cryptocurrency investors were up in arms in 2021 when Elon Musk announced Tesla wouldn’t be accepting the token because it was too wasteful.
This sparked a conversation about the cryptocurrency’s indulgent energy consumption and whether it was worth using the token.
Why Do We Need to Mine Bitcoin?
Mining digital currency might sound like a strange concept, but it’s the backbone of Bitcoin’s existence. At its core, Bitcoin is an open ledger, a record of every transaction. Miners play the role of gatekeepers, confirming transfers and securing the system. “Miner” is a bit of a misnomer—in reality, they’re more like accountants for the blockchain.
When “miners” verify 1MB worth of transactions, they’re rewarded with Bitcoin for their work.
Bitcoin runs on verification, not trust. Miners don’t know each other, but they don’t have to—as long as the incentives are there, the system works.
With a cap of 21 million coins, 19.9 million are already in circulation. Miner rewards, now at 3.125BTC, are cut in half every four years and set to drop again in 2028.
So, Is Bitcoin Mining Worth It?
The Digiconomist’s Bitcoin Energy Consumption Index estimated that one Bitcoin transaction takes 1252 kWh to complete, equivalent to approximately 53 days of power for the average US household.
A single Bitcoin transaction has the same carbon footprint as 842,000 Visa transactions or 51,210 hours of watching YouTube,
This begs the question again: Is any of this worth it, or should we scale down a bit on all the Bitcoin mining? Bitcoin is an unprecedented global network of money that has no single source of control. The more miners in a network, the more decentralized it is.
Even then the alleged energy consumption for Bitcoin is hyperbolic at best.
Bitcoin’s proof of work system is warranted to make it function; moreover, it enables Bitcoin’s best feature, decentralization, to work without a hitch. If functional decentralized money is important to you, Bitcoin is worth it.
Energy Sources For Bitcoin Mining
A few years back, ARKK Investment’s founder, Cathie Wood, debunked Musk’s assertions that Bitcoin mining is bad.
“The one thing that has changed here is the environmental concerns around Bitcoin, which have caused people like Elon Musk to pull away,” said Wood in a Bloomberg interview. “We believe even this is going to change, because first of all, the percentage of Bitcoin mined with renewables and hydroelectric power is quite substantial. In China, I believe it’s over 50%.”
She went on to add that miners have adopted green energy because they go to where power is cheapest. Cheaper power = more profits.
Even so, Bitcoin’s environmental impact is blown out of the water and for the most part is hyperbole. It’s important to note that more environmentally friendly cryptocurrencies are coming out daily and BTC is one of them.
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Key Takeaways
- Elon Musk sparked a conversation about the cryptocurrency’s indulgent energy consumption and whether it was worth using the token.
- The Digiconomist’s Bitcoin Energy Consumption Index estimated that one Bitcoin transaction takes 1252 kWh to complete, equivalent to approximately 53 days of power for the average US household.
- Bitcoin is becoming a “green” cryptocurrency
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