The news often points out that cryptocurrency production is energy-intensive because individuals, businesses and groups known as miners use specialized equipment to mine the cryptocurrency. They process huge volumes of transactions, grouping them into blocks and competing with each other to find a random variable that meets the predetermined requirements of the protocol.
Miners are rewarded for the calculations performed on their machines by issuing new bitcoins. Mining becomes profitable when the value of new bitcoins exceeds the cost of the energy used to mine them. This process takes 10 minutes and the winner is rewarded with a bitcoin.
How much electricity bitcoin really consumes
Bitcoin is said to use more electricity than the country of Argentina as a whole. While this may be true, it also provides a monetary network of digital assets that serves 200 million people, worth approximately $1 trillion in dollar terms. Cryptocurrency continues (overcoming resistance) to evolve into a monetary system that will replace banks, fiat money and financial institutions.
There are many activities that consume enormous amounts of energy – the same provision of social networks, watching television, or making traditional banks work. The question is to assess whether this consumption is useful.
We calculate the power consumption
Cambridge University has a counter on its website that shows the index of bitcoin electricity consumption (updated every 24 hours).
According to it, bitcoin mining accounts for 0.6% of global electricity consumption. But that doesn’t say anything, because in countries where mining takes place, the amount of energy it consumes will not exceed 1.29% of the total energy consumption of any given country. In the U.S., gaming consoles consume 0.25% of energy. It should be understood that mining is distributed between countries, so it is not correct to compare it with any particular country.
Unlike most industries, cryptocurrency products easily adapt to mining wherever electricity is available. For this reason, most mining in China is done next to giant power plants, in the U.S. next to gas flares to burn off excess gas or next to another energy source that is wasted.
Thus, bitcoin stores energy in cash equivalents.
Comparing electricity consumption
We can say that bitcoin has a positive impact: it promotes the use of renewable energy sources while reducing the cost of obtaining it.
Here are some examples of less efficient systems than Bitcoin:
- New Year’s Eve illumination, which has no value, consumes a lot of energy.
- Visa transactions: these are complex transactions, payments, etc. It’s a necessary thing, but global currency can replace payment systems at a small part of the cost.
- Banking: it’s millions of computers and servers running 24/7, cooling systems for them (30% of electricity is spent on that), air conditioning and other climate equipment, security systems, etc. Obviously, all of them consume more electricity per transaction than bitcoin transfers. Cryptocurrency will make things that bank does faster and cheaper.
- Petro-dollars, imposed as the reserve and only currency of commodities such as oil, backed by a military structure that consumes huge amounts of electricity.
- The whole cycle from mining gold to “going to the people” and securing it is far worse for the environment than a few servers next to a dam running the code.
- Electric cars, including the Tesla. Somehow overlooked is that they require electricity in large quantities. Where will it come from? Depends on the region, but most comes from non-renewable sources. Bitcoin is created using “green” electricity (water, wind, solar) 75% of the times.
Everything uses energy, the point here is to be as efficient and environmentally friendly as possible. Bitcoin is working hard to achieve both goals and is probably the biggest advocate of green energy.
Bitcoin may consume more electricity than Argentina, but in Argentina most of it comes from dirty sources. In addition, the country’s economy does not have the global impact on the world economy that bitcoin does. Cryptocurrency makes the financial world more efficient, secure, and transparent.
You can learn more about the tools and technologies of this sphere on the Cryptex website in the “Blog” section, you can also get the latest news from the cryptocurrency world there on https://cryptex.net/blog/en/.
Advantages of Cryptex cryptoexchange:
Cryptex exchange has several advantages that make it stand out from other similar services:
- Work with popular cryptocurrencies, secured with reserves to meet any needs.
- Simple and user-friendly interface. Both the exchange and trading platform, have a simple and clear interface that even a beginner can understand.
- Cryptocurrency exchange Cryptex offers an favorable exchange fee. For example, if you will exchange dollars to bitcoins and back, you will not pay any fee at all. Fees on deposits and withdrawals is noticeably less than most similar projects.
- Responsive support service. Competent specialists will always help you to solve any problem related to Cryptex exchange.
- Cryptocurrency exchange has its own Blog. There you can read news, analytics, study articles by experts.
- Protection of user account. Cryptex allows you to set up two-factor authentication to protect your user account from getting hacked. You can set up authentication via SMS, Google Authenticator, Telegram or email. In addition, you can set up an IP addresses that can access your account.
At the moment Cryptex is working on developing an Android-application of the exchange. With the help of this application it will be possible to use the exchange and trading platform not only from a computer, but also from a smartphone and a tablet.