Aside from theft, the possibility of price manipulation and regulations, another issue that Bitcoin and other cryptocurrencies have to deal with is the fact that it is energy intensive.
Bitcoin mining needs a good amount of energy to the point that it has the same energy requirement as that of an entire country. In fact, it is said that it can power Austria. And by the way things are going so far, energy consumption growing at 20% every month, it can consume the total amount of generated solar energy by next year.
Now, this is a serious problem especially for a lot of countries. You see miners to choose countries that have cheap electricity and cold weather. For this reason, Venezuela has been booming in terms of their mining industry considering the government has put a cap on the cost of basic utilities due to hyperinflation.
You also have places like Quebec that has been known as a suitable location where miners can relocate especially after China cracking down on mining activities.
And because of the problem faced by Bitcoin, there are those environmentally friendly crypto enthusiasts who came up with an idea of having a cryptocurrency that won’t consume much energy. There are the likes of SolarCoin and EnergyCoin. These digital currencies were designed to help create solar farms. And also, these energy-friendly cryptos consume less energy in terms of solving its algorithm.
One of the most promising greener version of Bitcoin is Bitcoin Green. Written in its 15-page manifesto, it is designed to address the “problematic exponential increase in energy consumed by Bitcoin”. It even adds that Bitcoin is “an existential threat to our beautiful planet”.
Bitcoin Green is said to be greener, faster, and more scalable than the original Bitcoin. And if Bitcoin is really serious in its goal of becoming a universal currency across borders without relying on third parties, this is exactly how it should look like. Bitcoin Green abandons “proof-of-work” mining strategy.
Bitcoin Isn’t Really That Bad?
If you will ask the Bitcoin enthusiasts, Bitcoin isn’t exactly as bad. For one, major mining facilities are already using carbon-free energy. And also, this creates a huge demand for more renewable power. According to Peter Van Valkenburgh who is the director of research ant Coin Center, which is a crypto nonprofit, “The fact is that the Bitcoin protocol, right now, is providing $200,000 bounty every 10 minutes to the person can find the cheapest energy on the planet”. He added that “Got cheap green power? Bitcoin could make building more of it well worth your time”.
Come to think of it, the concentration of Bitcoin mining operations is found in places with massive hydropower facilities. This includes Canada, Norway, and even in some regions of China. But of course, saving energy and using renewable energy are not really the same.
Bitcoin mining issues need to be addressed considering the amount of energy required for cryptocurrencies. These greener versions could actually pick up considering that regulators are also taking a closer look at the energy consumption within their area regardless if they are using renewable energy or not.