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article imageBitcoin's dirty little secret has real-world consequences

By Karen Graham     Dec 17, 2017 in Technology
Bitcoin is basically a cryptocurrency, secret computer money without any physical form. Today, one bitcoin is worth nearly $19,000, but to get one, you either buy from an online exchange or use special computer hardware to mine it, and that is a problem.
The continuing success of bitcoin has now attracted the attention of some serious thinkers, and it has nothing to do with how much money can be made - Instead, it is the realization that coal is one of the primary power sources behind bitcoin and its use is defeating our attempts to reign-in climate change.
The concerns about coal being a major component of bitcoin's rise are very real because the majority of bitcoin mining takes place in China, 58 percent, in fact. As Bloomberg pointed out last week, China is also the world's top coal burner, leading to the concerns over massive energy use in the form of a polluting fossil fuel.
Untitled
University of Cambridge
Mining bitcoin takes a lot of energy
Bitmain Technologies Ltd. has a server farm in Erdors, Inner Mongolia. Eight 100-meter long metal warehouses with about 25,000 computers are running non-stop, all of them working on solving the encrypted calculations that generate each bitcoin.
The operation runs on electricity produced from coal-fired power plants, as do other cryptocurrency farms popping up around the country. According to the Digiconomist, the global cryptocurrency market's use of power may already equal 3 million U.S. homes, topping the individual consumption of electricity in 159 countries.
And the use of global power will only increase. Alex de Vries, a 28-year-old blockchain analyst for the accounting firm PwC says the total amount of electricity used in bitcoin mining has increased 30 percent in just the last month. To bring this into focus - one bitcoin transaction consumes 240 kWh, which is enough to power 8 US households for a single day.
Stacks of computing power gives bitcoin miners a shot at harvesting crypto currencies
Stacks of computing power gives bitcoin miners a shot at harvesting crypto currencies
MAXIM ZMEYEV, AFP
“The energy-consumption is insane,” said de Vries, who started the Digiconomist blog to show the potential pitfalls in cryptocurrency. “If we start using this on a global scale, it will kill the planet.”
Faster and more efficient technology is not the answer
It is interesting to note that while technology has already given us faster and more efficient computers, those using them for mining cryptocurrency are not concerned about the electrical power needed to run them.
As with most technological improvements, from oil to manufacturing, and bitcoin mining, the whole purpose of better tech has always been to do something better and faster.
Factfile on the Bitcoin virtual currency
Factfile on the Bitcoin virtual currency
, AFP Graphic
“The greater the value of a bitcoin, the more electricity people will be willing to spend to compete for it,” says Michael Taylor, a computer scientist at the University of Washington, according to Wired. "Increasing the energy efficiency of bitcoin SHA-256 mining hardware helps only sublinearly, as improving energy efficiency simply means people can deploy more miners at the same operating cost.”
About the only thing that will solve the problem of high energy usage with bitcoin mining will be for its value to fall. Bitcoin miners run their hardware for as long as they can pay for the electricity. But, what if electricity prices were to rise? If the value of the bitcoins goes down or the price of the electricity goes up, off go the servers.
More about bitcoin, Coal, Energy consumption, cryptocurrency, bitcoin mining