Bitcoin is the future of our energy grid. It can store energy and has a unique way of using it, as you will later discover.
Bitcoin’s Energy Use
Bitcoin’s use of energy is a strong link between the real and the digital world. Some 100 years ago, Henry Ford proposed having a currency backed by energy for our planet. According to him, such a currency would; not be confiscated, have a fixed supply, and not be under the control of any government. At the time, nothing was even close to satisfying the design criteria.
The good thing is, with Bitcoin, there is a breakthrough. This cryptocurrency appears to be a great innovation. It is able to meet all these criteria in the following ways;
- It is a fixed supply asset that allows individuals to store value or wealth.
- Its private property rights are unconfiscatable.
- Its medium of exchange is peer-to-peer.
- It continues to be resilient despite the attacks it receives. This makes it a decentralized monetary network that no nation or country can claim to have control over.
Therefore, it is clear that Bitcoin is the future of our energy grid. With this in mind, the next question might be regarding its energy expenditure.
How Does Bitcoin Consume Energy?
As an estimate, the annual global energy usage is 173,000TWh, which is nowhere close to the amount accessible. Bitcoin in itself consumes around 110TWh of energy every year. This is approximately 0.55% of the total global electricity production and is almost equivalent to that of countries like Sweden and Malaysia.
Therefore, this monetary system consumes a lot of energy. However, you might wonder why it requires such a vast amount when all you do is click and tap on your phone or device to trade in this cryptocurrency.
Different people might have different opinions regarding this. However, knowing the exact way in which it consumes energy can help. Remember, Bitcoin’s decentralized structure is responsible for its consumption of energy. It needs computers to verify transactions, and this involves solving very complex math problems. In cryptocurrency, we call this concept a “proof-of-work” system. Unlike centralized networks, Bitcoin will use intensive amount of energy to do such verification.
Since the amount of energy Bitcoin uses is that huge, plans are put in place to ensure the energy they consume is more sustainable. It is not surprising to find lots of proof-of-work mining done using renewable energy.
Bitcoin’s Energy Consumption and Carbon Emission
Knowing the amount of energy a system consumes is easy. However, determining the amount of carbon it emits is quite difficult; you will have to know the energy mix. On average, mining Bitcoin is more carbon-intensive than gold. A single mined Bitcoin can amount to up to 191 tons of carbon.
The Future of Bitcoin’s Energy Use
Bitcoin is continually gaining acceptance and increasing in value. If this cryptocurrency becomes the energy currency that is recognized globally, the energy expenditure will automatically rise over time.