The future of bitcoin mining and electricity use. Cryptocurrency is the ‘Knight in Shining Armour’ of the financial sector, introducing millions of people to the wonderful benefits it provides — anonymity, adaptability, and security, to name a few – while Bitcoin and Ethereum are its two most popular squires.
People must, however, mine cryptocurrency in order for it to creates and for transactions to take place. Unfortunately, cryptocurrency mining requires a significant amount of electricity. Since, Bitcoin is the most widely used cryptocurrency, it is also the most heavily mined as well.
If you are familiar with the cryptocurrency world, you are more than likely aware that Bitcoin mining has been drawing increasing attention due to the negative impact it is having on the environment on a daily basis.
To be specific, the mining process for the genesis crypto asset amounts for 0.6 percent of global total energy consumption and consumes more electricity per year than Norway, according to the Cambridge Bitcoin Electricity Usage Index, which measures global electricity consumption.
Energy usage and cryptocurrency mining evolution
The future of bitcoin mining and electricity use. Twelve years ago, a home setup could mine Bitcoin. The energy required to mine one was minimal, and the value of Bitcoin was close to $0.
In 2022, you’ll need a room full of highly specialized devices, each costing thousands of dollars (up to $3,000), and an estimated $12,500 in energy.
In fact, mining Bitcoin to spend or sell consumes more electricity than Finland, a 5.5 million-person nation. Mining bitcoins causes more than just waste and pollution.
Mining hardware uses and discards since every mining group or organization seeks the quickest and most efficient equipment. This creates a new e-waste issue. Bitcoin alone generates more e-waste than midsize countries, according to economists.
Cryptocurrency mining laws
China has prohibited cryptocurrency mining due to the huge energy consumption involved. Crypto mining cease in China, which harms the worldwide Bitcoin mining sector, as much of it from China.
On the other hand, Iran, which had power outages last year, has banned cryptocurrency mining operations until March 6, 2022. This will free up 209 megawatts of power for domestic use.
The European Union may follow suit, as senior authorities advocate banning a mining process dubbed “proof of work” to save energy.
Clearly, these aren’t the final hard crypto mining regulations, and they won’t address the electricity issue any time soon.
Cryptocurrency is already establishing a firm foothold in the global financial system and will continue to grow in importance. However, if cryptocurrency mining allows to continue uncheck by not only authorities, but also by the industry itself. It would consume significantly more energy, thereby jeopardizing national and international climate goals.
For the time being, regulators will continue to penalise cryptocurrency mining in order to protect the electrical sector. Once cryptocurrency mining has begun to intensively research and employ renewable energy, it will remove one of the regulatory thorns in their side, potentially allowing them to consider cryptocurrencies such as Bitcoin as legal tender in the future.
Clearly, these will not be the last of the hard limits on cryptocurrency mining, and they will not, by themselves, solve the problem of electricity consumption in cryptocurrency mining in the foreseeable future.