Bitcoin’s enormous use of energy.. Could it be the cause of the’breakfast’

You’ve probably heard of people who say that everyone has become rich with bitcoin.

Musk’s electric car company Tesla recorded an valuation gain of more than $900 million (about 1 trillion won) after purchasing Bitcoin worth 1.5 billion dollars (about 1.7 trillion won) in early February.

News from celebrities such as Musk helped raise the price of a single bitcoin to more than $58,000 (about 65 million won).

Bitcoin didn’t just hit the peak in terms of price. Energy usage also peaked.

This was a headwind for Musk as Bitcoin’s impact on the environment became more pronounced.

Many celebrities also joined the bitcoin criticism procession. Most recently, US Treasury Secretary Janet Yellen has criticized Bitcoin.

“The amount of energy consumed to process bitcoin transactions is enormous,” said Yellen. “Bitcoin is an extremely inefficient way to conduct transactions.”

It is not clear exactly how much energy Bitcoin consumes. Cryptocurrencies were designed from the outset to be difficult to track. However, it is the opinion of the industry that Bitcoin mining is a very energy consuming business.

Recently, the Cambridge University Alternative Finance Center (CCAF) conducted a study on the rapidly growing virtual currency business.

The center estimated Bitcoin’s total energy consumption at about 40-445 terawatt hours (TWh) per year, with a median estimate of about 130 TWh.

The UK’s electricity consumption per year is around 300 TWh, and Argentina’s electricity consumption per year is similar to the bitcoin electricity consumption estimated by the center.

The energy used by bitcoin mining has far more polluting power sources.

In a survey of people running the world’s Bitcoin network, the center found that about two-thirds of the energy consumed by Bitcoin comes from fossil fuels.

Blockchain technology, a feature of cryptocurrency, requires enormous computational power (and thus energy consumption).

It also relies on vast decentralized networks.

The network also includes so-called bitcoin miners, who are also responsible for recording and verifying transactions using bitcoin.

The bitcoins they mine are also a reward for accurately managing these transaction records.

Data processing centers around the world collect and submit Bitcoin transaction records as appropriate for the system.

You also have to match a random number.

Bitcoin is paid to the person who first submits the transaction record and the correct number, which will be the next block in the blockchain.

Currently, if the submission is successful, the amount of bitcoins paid is 6.25, and the current bitcoin is worth $50,000 (about 56 million won).

When this is done, a new number is randomly generated and the whole process begins again.

Therefore, the higher the price of Bitcoin, the more miners will want to participate. This leads to an increase in Bitcoin’s energy consumption.

There is also another factor in Bitcoin’s increased energy consumption.

Bitcoin software always takes 10 minutes to solve a puzzle. Therefore, as the number of miners increases, the puzzle becomes more difficult and requires more computational power.

Bitcoin is actually designed to encourage more computational effort.

This comes from the idea that the more computers compete to maintain the blockchain, the more secure the blockchain becomes. Because in order for someone to shake Bitcoin, they have to have more computing power than the other miners combined.

In other words, as the value of Bitcoin increases, the computational power required to create and maintain it increases. Therefore, energy consumption is bound to increase as well.

It is also possible to track how much effort miners need to make Bitcoin.

Currently, it is estimated that 16,000 calculations are performed every second. It is 160,000,000,000,000,000,000 times.

This massive computational power requirement is Bitcoin’s Achilles heel, says Bitcoin expert Alex De Vries.

Hundreds of millions and trillions of operations are performed to maintain the system, but these operations don’t really do anything useful.

“The operations used in Bitcoin are operations that have no other purpose,” De Vries said. “The results of the operations are immediately discarded. We currently use a lot of energy to make these operations, most of which comes from fossil fuels.”

This makes it inherently difficult to increase the usage of Bitcoin.

“If bitcoin is used as the global reserve currency, the price of bitcoin will be millions of dollars, and miners will have to spend more money on electricity than the US government budget,” De Vries said.

“Then we just have to double the world’s energy production for Bitcoin,” he added with a laugh.

Bitcoin also limits the number of transactions the system can process to 5 per second, which he argues is not very useful as a currency.

Many experts in the financial sector and economics have the same view.

Ken Rogof, professor at Harvard University and former Chief Economist of the International Monetary Fund (IMF), says two key characteristics of a successful currency are the efficiency of transactions and the stable storage of value.

But Bitcoin doesn’t fit either, he said.

“In fact, even today (Bitcoin) isn’t being used very much in a legitimate economy. Of course, some rich sells to another rich, but that’s not the end use. Without end use, the currency has no long-term future. “

In other words, Bitcoin exists almost exclusively as a tool for speculation.

So, is bitcoin a bubble and will the bubble soon go out?

Professor Rogoff paused after saying, “I think yes.”

“But I don’t know when it will be.”