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Why Cryptocurrency Massive Energy Consumption Is Extravagant?


Overblown bitcoin energy consumption is leaving an adverse impact on environmental sustainability and different opinions exist of bitcoin miner experts regarding this major concern. (Read More)

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Do you know that bitcoin mining consumes around 128.77 terawatt-hours(TWh) a year? And is it likely to fall unless the value of currency collapses? Mining for cryptocurrency consumes a massive amount of power with heavy computers and machines, leaving a destructive impact all over the globe.

Mining is the process that involves transaction verification on the blockchain without relying on a central authority. Mining computers thrive on solving complex problems, and those computations require a massive amount of energy. There is a reward with newly mined coins and transaction fees once bitcoin miners solve this problem.

According to Cambridge University, bitcoin is presently representing 0.59% of the total global energy consumption. Digiconomist estimates that network energy consumption is hitting the figure of 82.026, which is, according to the site, comparable to Chile’s energy consumption. Since the beginning of 2020, Bitcoin energy consumption has surged up to 80% amongst an immense evolution in digital currencies. 

Let’s have a deep insight into enormous energy consumption and its adverse impact on environmental sustainability. 

Massive Electricity Consumption

Cambridge university suggested that bitcoin mining consumes more electricity as compared to the electricity consumption in Argentina. According to online tools, bitcoin electricity energy consumption is more than Argentina, i.e. 121TWh, the United Arab Emirates, the Netherlands, i.e. 108.8 TWh, and presently creeping up to Norway, i.e. 122.20 TWh.

Specialized computers are connected to cryptocurrency networks to mine. Their main job is the verification of transactions that send or receive bitcoins. This process includes solving complex problems, providing an obstacle for the assurance of combating fraudulent activities. Moreover, critics claim that tesla’s decision to invest a hefty amount in bitcoin. This week, the currency value hit the figure of $48,000, and according to tesla’s announcement, it has brought up to $1.5bn bitcoin and plans to accept it as a payment method in the upcoming years. 

According to the 3rd global crypto-asset benchmark study,  28% of the total energy consumed by crypto-mining come from renewable resources. People often develop an interconnection with a massive number of miners to the network to gain immense profits. That utilizes an unexpected amount of electricity because computers are more or less continuously working to solve puzzles. It is possible to estimate how much electricity is being consumed at a time by considering energy demand for the bitcoin network and the average electricity price per kilowatt hour ($0.05). 

What Bitcoin Mining Experts Have To Say? 

Let’s have a deep insight into what bitcoin mining experts have to say about the alarming bitcoin mining energy consumption, which is currently progressing by leaps and bounds. 

#1 Dan Held

The head of growth at crypto exchange Kraken, Dan Held, proclaims that the bitcoin network has been unjustifiably aimed by those claiming that bitcoin is taking its energy consumption irrationally. 

Dan Held declared that:

“What it really boils down to when people argue that they don’t like bitcoin energy consumption is they don’t actually like bitcoin. People who are not in favour of cryptocurrencies anticipate that bitcoin mining energy consumption is wasteful.”

Dan Held emphasizes the fact that everything in this world requires energy consumption, and with technological advancements, the amount of energy required to power that technology is facing immense growth in the near future. Almost all the things in our lives consume energy. Claiming that one utilization source of energy is less wasteful than others is absolutely subjective as all utilizations have paid market rates to use that energy. 

#2 Thillainathan

Thillainathan told business insiders that more energy consumption is required as the bitcoin network grows and simultaneously the profitability of mining increases. As an operator of mines, he affirms that minors should take environmental enigma under consideration during the mining process as energy consumption can adversely impact. He expects that bitcoin mining is beneficial as bitcoin prices surge in the market, and more miners should consider utilising renewable energy resources with this upcoming revolution. 

He claimed in front of Insider that:

“Being a strong believer of bitcoin, it is an efficient way to store wealth but being an infrastructure provider, it is a dire need that we are required to become as environmentally friendly as possible.”

Thillainathan stated that the energy utilised during mining is called “dirty energy”, and unfortunately, the energy is not sustainable in the longer run. He professes that one day the government will crackdown on the utilization of coal plants. 

#3 Mason Jappa

The CEO of blockchain solutions, Mason Jappa, who is also working as an operator of some of the largest mining rigs in the United States, affirms that bitcoin miners are financially incentivized for the operation on the cheapest possible electricity, which often concludes that they utilize energy that would have become useless.

Mason Jappa tweeted that, 

“Bitcoin mining enhances energy efficiency and simultaneously reduces kWh energy rates for the populous through curtailment agreements, ceasing energy consumption during peak hours, aims at renewable energy, improves energy technology, and reduces natural gas flaring. ”   

Jappa claims that US mechanisms are powered by the process which is called “gas-flare recapturing”. A chunk of gas is flamed out in the air when natural gas is mined. Bitcoin miners prevent that to release into the air and capture that flare for energy utilization. 

Environmental Enigma 

Environmental impact is thriving in parallel to bitcoin’s emergence and prominence. There would be no doubt in saying that crypto mining requires an enormous amount of energy. According to the latest data analysis by Cambridge bitcoin energy consumption (CNBC), this energy consumption might alarm Treasury Secretary Janet Yellen. 

Yellen said that:

“It is the most incompetent method of carrying out transactions, and the amount of energy consumes during the mining process is staggering.”

Also, CAGF explained that:

“The more machines operate for mining, the more there is a possibility to solve complex problems. However, more operating machines mean more energy consumption which raises the question of miners’ cost. ” 

CCAF affirms that they do not have enough data that backs the determination of crypto solution carbon footprint. Hence the major concern is growing bitcoin mining energy consumption and the threats that it is imposing to United Nations Sustainable Development Goals in the upcoming years. Also, it is a major concern for encountering the climate crisis.

Image source: Shutterstock Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://Blockchain.News/news/why-cryptocurrency-massive-energy-consumption-is-extravagant

Blockchain

China Reportedly Orders Bitcoin Miners in Sichuan to Temporarily Cease Operations 

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The Chinese government has reportedly intensified its crackdown on cryptocurrency mining and usage in the country by shutting down several crypto mining facilities in Sichuan.

Sichuan Bitcoin Miners Join the List

According to Wu Blockchain, the authorities of the Sichuan province officially issued a statement today, mandating every power supply company in the province to stop providing energy to crypto mining firms.

The statement also reportedly clarified that the power companies are to submit a situational report on June 25th. The new policy has mapped out about 26 large crypto mining hubs in the province that will be strictly monitored and subsequently shut down.

Although the province has several other small and medium-sized crypto mining facilities, the report alleged that they would not be shut down in the meantime as the government is investigating the activities of larger entities.

Incoming Regulation?

Another report confirmed yesterday that the Chinese authorities instructed all crypto mining projects to cease operations in Ya’an, one of Sichuan province’s major mining hubs.


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The preliminary meeting conducted yesterday was officially concluded today, with every large mining firm banned from operating within the Sichuan province for the meantime. While the cease and desist order is only for the short term, crypto miners in the region believe that the government may soon introduce regulatory guidelines. 

The report noted that all mining sites must be closed down before June 25th. However, since Ya’an is one of the areas of Sichuan with a lot of hydropower, there would be a massive energy wastage if the excess power within the location is not utilized for bitcoin mining.

A Full Crackdown on Crypto Miners?

The new development comes just a few days after several other bitcoin mining facilities in other parts of China received orders to cease operations. Yunnan province, Xinjiang, Inner Mongolia, and Qinghai have also ordered crypto mining operations to shut down amid investigations into the alleged illegal use of power for bitcoin mining activities. 

So far, the news has caused the hash rate of Ethereum to fall by 7%, while Bitcoin’s hash rate has not been affected at the time of writing. Meanwhile, an earlier report revealed that Bitcoin’s difficulty level has adjusted to a 5-month low as Chinese miners continue their relocation.

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Source: https://cryptopotato.com/china-reportedly-orders-bitcoin-miners-in-sichuan-to-temporarily-cease-operations/

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Blockchain

Another Week Another Failed Attempt For Bitcoin at $40K: The Weekly Crypto Recap

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Over the past seven days, we saw yet another unsuccessful attempt of Bitcoin to breach the coveted $40K mark definitively.

Let’s roll back a little. Last weekend, the price was rather indecisive as it was struggling beneath $36K. All this changed on Sunday, however, when bulls stepped in and took control over the market. By Monday, BTC was trading above $40K, and it actually managed to stay there for a few days.

This saw the community rather enthusiastic as the price was seemingly ready to continue with its recovery. Unfortunately, bears had other plans. On Wednesday, BTC’s price started trending downward and dropped to about $38,000. Yesterday was no better as we saw the market dropping even further. At the time of this writing, BTC trades at around $35,000 for a 4% loss on the weekly.

While bitcoin’s price is just 4% down over the past seven days, altcoins had it much worse. Ethereum crashed by almost 14%, ADA by 10%, DOGE by 13.6%, XRP by 11%, and so forth. In other words – Bitcoin continues to establish and recover its dominance over the market, which currently sits at above 45%.

Elsewhere, we had quite a few bullish news. MicroStrategy – the tech giant, spearheaded by Michael Saylor revealed its plans to sell Class A common stocks for as much as a whopping $1 billion, with part of the proceeds potentially used for making more bitcoin purchases. If history and Saylor’s preferences are any indicators – this is likely to become a reality.

A report conducted by FT also showed that hedge funds plan to allocate up to 7% of their portfolios in cryptocurrencies over the next five years, highlighting the long-term potential of the industry.

It wasn’t all good news, though. The United States Securities and Exchange Commission (SEC) once again postponed its decision on the Bitcoin ETF proposition made by investment manager VanEck, which shows that regulators are not yet ready to take a decisive step of the kind.

Price-wise, the market is pretty much range-bound, and it remains very interesting to see if we’ll see a breakout in any direction soon.

Market Data

Market Cap: $1472B | 24H Vol: 79B | BTC Dominance: 45.2%

BTC: $35,360 (-4%) | ETH: $2,153(-13.8%) | XRP: $0.777 (-11.1%)

The Crypto Headlines You Better Not Miss

Spanish Banking Giant BBVA to Launch Bitcoin Trading and Custodial Services in Switzerland. The Spanish banking giant Bilbao Vizcaya Argentaria (BBCA) will be launching a bitcoin trading and custody service for private clients in Switzerland starting June 21st. However, the entity has no plans to actively manage any funds related to crypto investment.

Paraguayan Official Confirms: In July, We Legislate Bitcoin. After hinting that they would draw out cryptocurrency legislation last week, an official from Paraguay has now confirmed that the laws are coming in the month of July.

VanEck’s Bitcoin ETF Application Further Delayed by the SEC. The United States Securities and Exchange Commission (SEC) has decided to postpone its decision on the Bitcoin ETF proposition made by the investment manager VanEck for yet another time.

Rep. Maxine Waters Announces a Task Force to Study Crypto and CBDCs. Trying to stay on top of cryptocurrency regulations, Representative Maxine Waters announced a task force on Financial Technology that will be studying crypto and CBDCS, as well as their impact on US politics.

Hedge Funds Plan to Allocate 7% of Portfolios in Cryptocurrencies by 2026: FT Survey. According to a recent survey conducted by FT, hedge funds plan to allocate up to 7% of their portfolios in cryptocurrencies in the next 5 years. This signals their confidence in the long-term potential of the industry.

MicroStrategy Could Buy More Bitcoin With $1 Billion Stock Offering. The technology company MicroStrategy, spearheaded by one of Bitcoin’s biggest proponents – Michael Saylor – revealed its plans to sell Class A common stocks worth $1 billion. It also plans to buy more BTC with some of it.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Cardano, and Solana – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/another-week-another-failed-attempt-for-bitcoin-at-40k-the-weekly-crypto-recap/

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How Many Bitcoin U-Turns? Goldman Sachs Now Says Bitcoin Is Not a Viable Investment

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The US multinational investment bank Goldman Sachs continues with its 180-turns on the cryptocurrency industry. After its recent interest that included filing for a Bitcoin ETF and exploring crypto as an asset class, the institutions’ latest report said virtual currencies are not a “viable investment.”

Crypto Is Not a Viable Investment: Goldman

It’s safe to say that Goldman Sachs has displayed a controversial approach to the cryptocurrency space. The latest report coming from the Wall Street giant takes it back a notch by going to its hostile policy from previous years.

Titled “Digital Assets: Beauty Is Not in the Eye of the Beholder,” it touched upon some of the most recent concerns, including high energy consumption required in the process of mining. This topic was raised in May by Tesla’s Elon Musk, who criticized BTC for using too much coal fuel.

Despite numerous reports claiming otherwise, Tesla disabled bitcoin payments citing environmental issues.

The paper also touched upon cryptocurrencies’ usage in ransomware attacks after numerous hacks transpired on US soil in recent months. After each, the perpetrators indeed requested the payments to be sent in bitcoin.


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Furthermore, the document named impending regulations as the “biggest risk to the speculative aspects of this ecosystem.” Keeping in mind all of these concerns, the bank concluded:

“After analyzing various valuation methodologies and applying our multi-factor strategic asset allocation model, we have concluded that cryptocurrencies are no a viable investment for our clients’ diversified portfolios.”

How Many U-Turns?

The mentioned-above word ‘controversial’ might not be strong enough to describe Goldman’s ever-changing views on the industry.

The institution was among the first regulated entity to launch a crypto trading desk all the way back in 2017. Yet, that came amid the parabolic price increases, and when the year-long bear market followed, Goldman halted the initiative.

In the meantime, Goldman held a conference call in which it said bitcoin is not an asset class. Bank executives repeatedly questioned BTC’s ability to serve as a reliable store of value and blasted its volatility.

Yet again, Goldman restarted the trading desk this year when, once again, prices were skyrocketing to new highs. It also filed for a Bitcoin ETF with the SEC, explored launching custody services, added BTC to its year-to-date returns report, participated in investment rounds in crypto projects, and enabled clients to trade bitcoin derivatives.

With all of that in mind, it’s not such a surprise that Alex Kruger and other crypto community members viewed Goldman’s latest U-turn as nothing out of the ordinary.

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Source: https://cryptopotato.com/how-many-bitcoin-u-turns-goldman-sachs-now-says-bitcoin-is-not-a-viable-investment/

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