One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week ... where is Bitcoin heading?
Indeed, Bitcoin uses a lot of electricity.
I don't think most of the Bitcoin investors realise how much electricity the Bitcoin network is using to confirm blocks.
In a future where we respect the environment and take great care of our planet, where is heading Bitcoin? Its high consumption of electicity and colossal emission of CO2 doesn't look very good. Will Bitcoin be able to adapt ?
Bitcoin had opened the pandora box in 2009 when Satoshi Nakamoto created the blockchain and built Bitcoin on it.
It's important to understand the blockchain is the technology that allowed the creation of Bitcoin, a simple coin you can send or receive.
The blockchain can do much more but not if you design it the same way it has been built in 2009.
Bitcoin has become very expensive to use, slow and not able to scale. We have seen the turmoil of the last forks. The world needs new blockchain technology that will allow people to interact with each other without middlemen, instantaneously and with no or minimal cost. They need to be able to manage tens of thousands of operations per seconds as the whole world will use them.
That's why we see emerging alternatives to the classic "Proof Of Work".
DPOS (delegated proof of stake) is one example. It's fast (thousands of Tx /sec), economical and scalable. You can find these blockchains behind projects such as BitShares, Steem or Peerplays. Operations are maid within 3 sec, decentralisation is optimal, transactions cost pennies or nothing at all, they can already manage Visa and MasterCard transactions processing levels. With these blockchains, we see emerging the first products ready for the worldwide usage.
This reflexion has been inspired by this article on MotherBoard:
Bitcoin's incredible price run to break over $7,000 this year has sent its overall electricity consumption soaring, as people worldwide bring more energy-hungry computers online to mine the digital currency.
An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins. That's about as much as Nigeria, a country of 186 million people, uses in a year ... (read the full article)
Totally agree with you ;)
Great post thank you!! The community can't even agree on Seg2X....we are far from applying proof of stake to bitcoin...sadly!!
I had no idea it requires so much electricity.
Great post.
BTC started the 'game', it is old, but well known.
In time something new, something with REAL value will appear.
Maybe a gold backed coin?
You'll still depend on the organism who keep the gold backing the cryptocurrency. It would be somehow centralised.
I think the value will come from the service provided by the blockchain. Like Steem provide you a blogging platform, rewards and content. Bitshares provide you a banking experience without middlemen.
The big winners will be the ones with good services and good technology. Forget about anything that is not able to bear worldwide usage.
Agreed, the decentralized part is the key IMHO
This is why EOS is going to take the top position soon. DPoS is just smarter than POW. There's no competition in DPoS to be the one to complete the block. There is a schedule that every 3 seconds each block is completed by one of the 21 block producers. The community will stake their coins in the wallet of one of the active block producers if they want to make dividends on their coins. This process can be done by anyone in the community with coins, and people can profit from the blockchain transactions without having to use their electricity to do so! It's a game changer.
I think, naturally DPOS chains will move along naturally with EOS. Same creator, same community, same basic technology. I may be wrong but I see BitShares being the decentralised exchange on EOS and Steem the default social network.
So, Bitcoin started it all and now we are moving to V2 of the blockchain method which can only be a good thing.
As with everything development has to keep pace and one of the things I hear top economists complain about is Bitcoin's is its speed.
Great post thanks for sharing
The new tech is already here and tested since 2 years. Dan Larimer created Graphene chains with BitShares and you are actually using his 2nd chain right now by posting and voting in Steemit. Just count how many seconds it takes to upvote my comment and you'll have the confirmation block time ... yes, it is the fastest decentralised chain out there !
The underlying factors which make this issue complicated also help to define larger issues which the world must deal with, and quickly! It is challenging to weigh the pros and cons of solutions such as proof of work, when there are downsides buried in the long list of positives, which may negate the positive outcomes in the long run. Clearly the entire rebuilding of the internet in a decentralized fashion will not be done exclusively on Bitcoin's codebase. Proof of stake, proof of computational correctness, stake time, and many hybrid options will be used for the use cases they best fit. Steemit has shown us the way to deliver short term benefits that are just plain superior to the alternatives, while still addressing long term problems of its own codebase, as EOS is built out, and we get a handle on what really works. How much of this energy issue will be solved by selecting different consenys algorithms, and how much by switching miners to run on renewable energy? And is anyone weighing the carbon and ecological footprint of solar versus wind? how about the insane impact of battery technology on the natural world? the key is to go full-stack deep in performing the impact audits. don't just stop at renewables vs. fossil fuel power, lets go all the way down!
We will find, drilling deep enough into the engineering parameters, that more recent battery technologies offer far greater advantages of lower environmental impact and better system cost than prior art- even lithium is decades old now, and proven NOT the best alternative; it is, however, even more widely-deployed than lead-acid nowadays (which still has a monstrously huge usage), and its market will not be noticeably affected for at least another decade or two.
Definitely a point to consider also all the money invested in a technology that is very slow and now more or less centralized.
There is so much to say about Bitcoin "decentralisation" that I prefer not to dig into. I'll write something on it maybe later.
This reflexion is a mere introduction on the Bitcoin problems and a way to share this article from MotherBoard.
What will be the usefulness of a very expensive (its ~$6,000 now) digital money that only a few can afford? How can the average person compete with computer mining farms? What will be option once the central banksters decide they have had enough of cryptocurrencies?
The facial value is not related to the measure of expensive or not. Whatever the facial value of the Bitcoin (facial value is the value of 1 BTC. like the value of a 1USD bill) the way to know if a currency is expensive or not is the buying capacity you got. In financial, we use the Bigmac (comparison of the bigmac price in different country) to know if a country is more or less expensive.
As example, the euro value is 1 €, the PHP value is 60php = 1 €. The philippines money is "very cheap" 1PHp = 0.01666€. So the PHP is 60 time times cheaper than euro..... but
1 bottle of wine in France cost 2€ (120PHP). The same bottle in the Philippines cost 1000 PHP (16.66€).
Bitcoin will be expensive if the price of the goods (bottle, car, house, coat,... ) paid in btc is all the time the same whatever the value of the btc in Euro or USD. for example your bottle of wine cost 0.1 (2.5€ to 3€) btc in 2015.... and today the same bottle cost 0.1btc (570€)