x

Bitcoin the Environmentalist

by

         Bitcoin the Environmentalist

A lot has been made of Bitcoin’s environmental impact. With the mining network now more powerful than all of the world’s top supercomputers combined, it’s understandable that some people would become concerned about power consumption and waste. Shouldn’t there be a better way to do this, and is it even worth it, at all?

First, to answer the former question. One alternative to using processing power to mint coins–known as proof-of-work–is the proof-of-stake system. In proof-of-stake, new coins are minted (and the network secured) by those holding coins in the same place for a period of time. This, however, concentrates control of the money supply directly into the hands of the wealthy, and discourages the spending and trade in the economy.

One would think that we could use all of that mining power to solve practical problems, but the reality is more complicated. A cryptocurrency must follow an algorithm that can be easily calculated one way but is immensely difficult to calculate in reverse, and few practical problems meet these conditions. Even Primecoin, which servers to calculate new prime numbers, can only calculate primes of very specific types.

So what is there to do? The reality is, we don’t need to do anything. Bitcoin miners already serve a practical purpose: they secure a free, decentralized financial system. Conversely, consider the power expenditure of many obsolete facets of the traditional financial system–armored cars, posh banking lobbies, and countless bureaucrats who spend their wealth on luxuries while contributing proportionately little to society. Combined, these things are more wasteful than cryptocurrency enthusiasts could ever be.

Meanwhile, Bitcoin will continue to improve. Mining hardware gets more efficient every day, with rising investment costs but drastically-reduced power consumption. Large mining centers can easily relocate to countries where clean electricity is in high supply, and provide heat in cold weather. The banking system, on the other hand, has no intention of reducing its unecessary fees, or lowering the salaries of bankers who can now effectively be automated. If you want to see a real example of reckless greenhouse gas emissions, look at your average corporate jet.



Recommended

Op Ed: With Bitcoin, Anarchy Is the Point, Not the Problem

In a SXSW panel discussion, IBM’s Christopher Ferris asked bitcoiner Jimmy Song if he was arguing for anarchy over a regulated financial system . In this op ed, Kyle Torpey posits, "Yes! That’s the whole point!"

Kyle Torpey

Op Ed: Hanging Money Launderers Out to Dry: The Role of KYC/AML in Blockchain

In this op ed, CoolBitX CEO Michael Ou argues that "anonymity contributes to cryptocurrency’s notorious volatility and makes it that much less likely that digital currencies will become stable stores of value."

Michael Ou

Bitcoin Price Analysis: Slow Grind Could Lead to Short Squeeze

Last Friday, we discussed a macro resistance level bitcoin would likely test. The level was tested three times prior and immediately rejected. Now, for the fourth time, we find ourselves situated above the level as we wait to see if our support holds.

Bitcoin Schmitcoin

Bitcoin Price Analysis: Could Three Times Be the Charm for This Resistance Level?

Bitcoin remains in its tightly coiled range as the market continues its sideways trend for the third week in a row.

Bitcoin Schmitcoin