No doubt the skyrocketing Bitcoin price is luring in investors who all want to dig deep into this gold mine. But amidst all these, we are forgetting the whopping price our world is having to pay for the same. Miners are entering into the field of cryptocurrency mining with renewed zeal but they need to solve “increasingly more difficult cryptographic puzzles.” One Bitcoin transaction of present times consume about 215 kilowatt-hours of electricity which can easily suffice an average American home for one whole week.
Electricity cost accounts for almost 95% of the entire mining expense. That surely is a big percentage instigating miners to shift base to places offering cheap hydropower such as Tibet. Overseas countries such as Malaysia, China and Iceland have big number of data centres consisting of gigantic supercomputers which can very well be termed as “energy-sucking monsters.”
Bitcoin Energy Consumption Index published by Digiconomist states that Bitcoin mining is consuming a lion’s share of global energy base leaving a meagre portion for other payment systems such as Visa to operate. The energy requirement of Bitcoin exceeds Visa by 27 times and Ethereum by 3 times. In stark contrast to Bitcoin, Ethereum works with an energy-conservationist mode to limit their intake to the bare minimum.
Digital currencies are surely offering us with a whole new range of possibility however inherent limitations and opportunity costs need to be considered before jumping onto this crypto bandwagon.
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