No, Bitcoin Won't Use Up All The World's Energy

in #bitcoin4 years ago

Investing #​NewTechJUN 18, 2018 @ 09:44 AM202
No, Bitcoin Won't Use Up All The World's Energy

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Ideas from Forbes Investor Team

Clem ChambersClem Chambers, Contributor


One of the first thoughts anyone looking at bitcoin will have is the amount of energy used by miners to maintain the blockchain. Apparently, some people think that bitcoin and blockchain will boil the seas dry with its energy consumption.

Bitcoiners would say this is FUD--the modern equivalent of BS or just straight lies and is often used as an out of hand rebuttal of argument. FUD stands for fear, uncertainty and doubt and used to be an old strategy in marketing to confuse your competitors and keep them from buying your product in a corporate environment generally ruled by a culture of CYA (cover your rear) and fear.

Bitcoin using too much energy is thus pure FUD as it originates in the sectors that will lose more or be disrupted most by the blockchain, the latest being the Bank for International Settlements (BIS), a core piece of the global banking infrastructure.

Let’s have a quick look at banking’s footprint. According to the world bank there are 12.5 bank branches per hundred thousand people in the world. That doesn’t include their massive energy-munching head offices and titanic server farms, the scale of which I’m sure would embarrass even the mightiest bitcoin miner.

The world population is 7.6 billion so there are, at least, according to the World Bank (and they should know), just shy of 1 million bank branches. The have 3 million ATMs, roughly the same number of machines as there are ASICs mining bitcoin. As such, bitcoin uses the same amount of energy as the banking sectors ATMs, leaving that business to boil the oceans with 1 million branches and the resource drain of 60 million people and their associated overheads. (Yes, a bank like HSBC does employ 228,000 and have 3,900 offices.)

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There will, of course, be changes to blockchain technology to scale it and make it more energy efficient, but energy consumption is only an issue to those that haven’t looked into it.

Bitcoin and other cryptocurrencies also potentially replace gold as an international asset of last resort and it is said the energy expended raping the earth for the precious gold monetary relic is five times that expended on bitcoin. Even if it was a 1:1, the replacement of gold by bitcoin would surely be an environmental good.

Then you just have to multiply out the ponderous, soul destroying processes that require never-ending paper chases to see that crypto would be a giant boon to the environment as the leviathans of energy-gobbling bureaucracy fall to the greater efficiency of crypto.

I don’t mean to go all Marxist on my gentle reader but in the end it all comes back to energy efficiency because everything backs out to energy costs in the end. If crypto and blockchain is not more energy efficient it simply won’t be economically feasible to use it because banks and their offices, ATMs and tens of millions of workers will simply cost less than the blockchain alternative.

Can you see that happening? No, nor can anyone.

There is, however, a pinch point. This pinch point is energy. There simply is not enough of it being laid down for the future, and I mean electricity.

Is it really smart to hold every photo I ever took in the cloud? Is it really a good idea for Google, Microsoft and Amazon to be hoovering everything I say and do into massive server clouds powered by hydro power? Does anyone complain about this boiling the seas?

Well consider this. Google grosses $110 billion in sales, it makes $12 billion, it has 12,000 billion yearly searches, call it 1c a search. (That in its own right is rather fascinating.) When energy makes up a huge amount of that cost, its 8% margins start to look mighty slim and the sudden bans on crypto advertising amongst the likes of Facebook, Twitter and Google start to seem more than coincidental as the crypto miners start to gravitate to the cheap energy that keeps these companies in the business of data hoarding.

Yet this is only the tip of the iceberg of energy shortage just over the brow. If the dream of electric cars and trucks is to be realized and Europe is actually stating it wants petrol and diesel gone by 2030, the world needs 50% more power stations.

It is worth stating again. If the U.S. and Europe are going to dump the internal combustion engine it will need 50% more electricity infrastructure and will have to install it in 20 years.

They’d better get cracking and we’d better get buying those stocks.

Meanwhile, expect lots of FUD around anything that draws electricity and threatens to drive electricity prices high. It is coming and lots of the darlings of silicon who claim environmental credibility while sucking power out of the system with a mighty force will feel the pinch as their energy hungry ways catch up with them.960x0.jpg


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Mining of cryptocurrency is also play major role in global warming and it will be major issue worldwide in future

Thank you bro i really appreciate your knowledge hope you will keep posting these in future too

Nice post good info Bitcoin is future.

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