London, UK, 4th Oct 2021, – Bitcoin is a decentralized currency. This basically means that there isn’t one company or website that has control over the system. Instead, anyone with an internet connection can download software that will connect to other people running the same software over a peer-to-peer network, a bit like torrents. This is what enables you to send and receive bitcoins without the need for a central authority, or server for that matter. In fact, none of this would be possible without bitcoin open-source software.
FinancialCentre Broker David Porter says that you might think that all your transactions with bitcoins are anonymous, but the truth is they’re not. In fact, bitcoins use a technology known as the blockchain, which publicly records every transaction that was made from one wallet to another. The only thing it doesn’t tell anyone is who owns the wallets.
The simplest and the best way is to buy them using your own national currency through an exchange but let’s face it, that’s not very fun or easy to do without handing over your identity and details to some website on the internet, never knowing if they’re just going to take your money and run.
Bitcoin mining is all about generating new bitcoins by confirming transactions on the system through solving mathematical problems with your computer hardware. You can even use this to generate bitcoins while you’re away from your computer if you set up a “mining pool” where your computer joins a group of other computers to solve these problems.
The Bitcoin system is laid out in a way that the difficulty of the problems being solved increases over time as more people start mining bitcoins; this prevents anyone from easily adding new bitcoins to their wallet and helps secure the network against fraud. Today, the total bitcoins quantity is capped at 21 million, which will be reached around the year 2140, so unlike real-world currencies, it cannot be inflated, and since the number in circulation is known, everyone can see how that will affect their own holdings.
However, there is one problem associated with bitcoin mining which is the environmental cost of running these mining computers. To put it simply, Mr. Porter said that the bitcoin network is consuming more and more energy as time goes on, and if we were to use this method of generating bitcoins forever, it would rapidly deplete the resources of the planet Earth. Earlier this year, the bitcoin network consumed as much energy as the entire country of Ireland! The University of Cambridge reported that the bitcoin electricity combustion index, bitcoin miners are using around 130 Tetra Watts of energy which is huge.
A proposed solution to this problem is that machines are made specifically for bitcoin mining, they are around 100 times more efficient at solving these mathematical problems than regular computers.
How about buying powerplants?
Keeping this in mind, bitcoin miners are heavily considering buying their own power plants. There is one such firm in Pennsylvania called Stronghold Digital Mining which is working on this idea. The plant was purchased this summer after raising funds worth 105 billion US dollars. The power plant currently runs on coal waste and generates enough energy to power around 1800 computers used to mine bitcoin. The plant burns 600,000 tons of coal waste per year. Last month the company purchased another plant and is currently working on purchasing another one to help mine bitcoins.
While the company is on its way to business expansion, the environmental impact seems to be a growing problem. Mr. Porter thinks that buying power plants to mine bitcoins is definitely an idea that’s gaining traction, but to him, it cannot be regarded as an appropriate way out.
It is true how today, bitcoin mining has turned into a lucrative business; billions of US dollars were raised this year alone by people building bitcoin mines. This trend might just slowly turn into something much bigger than it already is if businesses begin buying power plants to mine bitcoin. The environmental impact, however, remains to
While bitcoin mining in itself is not harmful but it does have some environmental costs, especially if everyone in the world is doing it. What they need to develop are better machines that consume less energy for mining bitcoins or come up with more sustainable ways of mining. Bitcoin is a new concept, and it’s definitely got some problems, but we cannot deny the fact that this will be an important step towards a cashless society with complete transparency where fraud and imaginary inflation will no longer exist.
Now is the time the miners all around the globe realize the environmental impact and start looking for less harmful options of mining bitcoin, such as nuclear power. It may be a nice idea to buy your own power plant but this will not solve the problem if everyone starts doing it.
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