but today, you can’t mine a bitcoin unless you have a room full of powerful specialized asic machines that cost thousands of dollars each. if you are mining bitcoins today, it will be caught on camera:
don’t you? good.
The cost of electricity required to mine a bitcoin today is equivalent to your household electricity bill for 9 years – a whopping $12,500! don’t worry, as the bitcoin you will generate later is worth $50,000.
generating bitcoin has become more and more power hungry day by day. In just five years, the bitcoin network went from consuming 0.5% of all the electricity consumed in the world, to 10x. if you can’t estimate its enormity, here are some examples:
the bitcoin network uses:
- the same electricity used by the entire state of washington.
- more than a third of the electricity used by all cooling systems in the us. uu.
- this is incredible, more than 7 times the electricity that google uses for all its operations. (source)
The process of creating bitcoins consumes 91 terawatt-hours of electricity per year, and that’s more than the annual consumption of the entire country of Finland (population: 5.5 million).
if bitcoin were a country, it would rank 33rd in global energy consumption.
why is bitcoin so power hungry? why?
Paper money has been one of the most innovative concepts in history. people traded goods for it, and the paper always held its trade value again.
However, when crimes such as black money, fraud, counterfeiting, theft emerged, banks and the government began to get involved in transactions and obtained their regulation on our own paper money.
Although you are the owner, you are asked for an explanation if you transfer a large amount of money.
Which is why, in 2008, an unknown anarchist or group of anarchists by the name of satoshi nakamoto wondered if they could do away with this traditional money management system altogether.
That’s when the first idea for bitcoin emerged.
Unlike paper money, bitcoin is not regulated by a single authority. all transactions are recorded by the decentralized network of bitcoin users.
This means that all participating devices record every transaction, small or large. only then, the transaction would be completed. and this is how this system eradicates the “black”.
Imagine a person in rural Nigeria buying a piece of gum at his neighborhood store with bitcoin. and by nature, your transaction would be completed only after the entire bitcoin network, including your device, registers it.
now if bitcoin becomes widely established, imagine how many millions of such transactions are still happening in the world every second! And how vigilant and fast should the blockchain system be? now you’ve got it.
At first, this new and untested concept was completely foreign to people. Little by little, they understood it and began to like it for its benefits.
for bitcoin, you can send as much as you want. anytime, anywhere, as long as the internet is intact.
playing a high-tech guessing game, where the players are not human.
Let’s say I assume a number between 1 and 10 and ask three of my friends to guess it. and there is no limit to the number of guesses they can make. chances are, in a few seconds, someone will be the winner of my pizza party.
Now suppose I challenge not three but a million people, not a digit between 1 and 10, but a random 64-bit hexadecimal, and not a pizza, but a prize in thousands of dollars cash. that’s exactly what the bitcoin network does.
It continues to challenge miners around the world to guess its huge number, and whoever guesses it first will be rewarded with a “block” or 6.25 bitcoins. if the game is tied, the player with the highest number of hits is honored. and the game keeps refreshing over and over again. in fact, on average, once every ten minutes someone earns bitcoins.
p. but why is it called ‘mining’? 🪨⛏
We know how much physical work is involved in extracting metals like gold, silver, etc. from the quarries. and it is a fact that supercomputers do comparable computational work in breaking the code to generate new bitcoins. hence we call it metaphorically with the word mining.
p. why the vague number 6.25?
When the first bitcoin was mined in 2009, the guessing game was relatively simple, plus the reward was higher (50 btc per block). when too many people flocked to bitcoin mining, the network would increase the difficulty and decrease the reward to keep production stable. as of today, it’s 6.25 btc for the winner.
there is a chronological pattern
called bitcoin halving. On average, every four years, the network halves the reward for the winner. this means miners have to work harder and harder to get smaller and smaller rewards.
back in the days of james, when bitcoin was not very popular or trendy, and worth a dime, he mined myriads of them on his hard drive with his probably old pentium pc.
the days are not so anymore.
now they say, “bitcoin came out of nowhere and is eating the world’s electricity.”
To mine bitcoins today, we need powerful mammoth-sized asic machines, lots of maintenance, security, money, and coolants to keep the relentless bitcoin-hungry machines from overheating. these cannot be owned by one person. companies buy, build or rent data centers to mine bitcoins.
They’ve also gotten smarter. now they are pooling their resources and evenly distributing their bitcoin earnings so that everyone gets, say, $10 a day instead of $50,000 every 10 years. a better and more promising deal.
It’s happening all over the world, often where cheap energy is plentiful. For years to date, the Chinese have mined the most bitcoins, followed by the United States.
the bitcoin problem encompasses more than just the electricity bill. the accumulation of obsolete hardware is a bigger problem. To win the guessing game, everyone needs the newest and fastest machinery. As new CPUs hit the market, companies rush to buy them, dumping the old ones into nearby landfills.
They don’t care about the soil pollution it causes. they just ignore.
As the world’s miners are largely anonymous, it’s hard to know how much of bitcoin’s mining is powered by renewable sources. however, it is estimated that globally, between 40 and 75% of bitcoins are mined using renewable energy.
wait! It’s not good news, it’s not bad news either.
using renewable energy for bitcoin mining means that it will obviously not be available for homes, vehicles and factories.
If bitcoin mining runs on natural gases, it would end up wasting electricity to drill into the earth entirely. if we use hydroelectric power, what if it doesn’t rain that year? do we stop mining? if we use solar energy, it is hardly enough. this has become a complex issue.
For sustainable mining, environmentalists suggest altering the way bitcoin works, such as an alternative accounting system, an alternative transaction method, etc. that use less energy. the counterargument says that bitcoin holders have gotten used to the default way it works and that tampering with the system doesn’t work.
As far as we could foresee in the future, we did not find a permanent solution to bitcoin’s environmental mishap. not even after February 2140, when the last bitcoin will be mined. because at that time many other cryptocurrencies are added to the list.
after el salvador became the first country to recognize bitcoin as legal tender (along with the US dollar), it planned to establish a “green” bitcoin mining station.
In September 2021, it began harnessing the volcanic gases from the Tecapa volcano, 66 miles from the capital, to boost bitcoin mining. In addition, they installed 300 computers to solve the complex mathematical equations.
“We do not spend resources that pollute the environment, we do not depend on oil, we do not depend on natural gas, on any non-renewable resource” — daniel Álvarez, president of the hydroelectric executive commission of the lempa river.
although bitcoin is virtual, it has left a big mark on the physical world. it’s connected to the things we rely heavily on in our lives: fuels, electricity, and space.
Everything we imagine with digital transactions is a brave new world, but bitcoin does not seem to be the perfect solution for it. maybe the coin code needs to be changed for efficient trading, or maybe a new “green” cryptocurrency needs to arrive.