Have you ever thought about the energy cost of bitcoin? Bitcoin was first released in 2009. Creating bitcoins, a process known as mining, uses huge amounts of electricity and green campaigners are now questioning bitcoin’s impact on global energy use. It’s all very well for billionaires like Elon Musk, but what about the ordinary, average person – is bitcoin a good option for them?
People invent all kinds of ways to make a lot of money quickly and with little effort. Well, if you really want to get rich quick, maybe you should copy technology tycoon Elon Musk. Recently he invested one and a half billion dollars in the cryptocurrency, bitcoin. Bitcoin has made some people very rich, very quickly, but as we’ll be hearing in this article, it’s not without its critics.
The use of the virtual currency… it’s all very well for billionaires like Elon Musk, but what about the ordinary, average person – is bitcoin a good option for them? when we ask about investing in bitcoin to ordinary people. we see that they are risk-averse. Sometimes, everything seems to be working out for people who invested in bitcoin. But the recent buzz around bitcoin has also highlighted another, less positive side of the story – bitcoin’s environmental footprint.
Mining bitcoins, the complex process that creates new coins, uses a lot of electricity. Recent estimates show that bitcoin has now overtaken the entire annual electricity use of Argentina!
Michel Rauchs works at Cambridge University’s Centre for Alternative Finance which monitors bitcoin’s electrical consumption and he is saying:
“Bitcoin consumes just a colossal amount of electricity and now whether that electricity expenditure is really worth the benefits, I think that really depends on how you value bitcoin itself… but just looking at the electricity consumption, I think we need to put things a bit into perspective… so, on the one hand if you compare it to a country like Argentina, it’s just incredible, awe-inspiring… on the other hand, if you compare it to, for example, home appliances that are always on – on standby but not being used – in the US alone, that consumes twice as much electricity on a yearly basis as the entire bitcoin network.”
As you see Michel thinks that to assess bitcoin’s energy use we must put things into perspective – find the true, objective value of something.
Comparing bitcoin’s energy use to a huge country like Argentina sounds monstrous. But looked at another way, bitcoin only consumes half the electricity used by all US televisions and other home appliances left on standby – which means powered on and ready to work when needed.