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A common misconception about Bitcoin mining is that it wastes energy. This is not true! Mining creates abundance, not waste.
When you think about it, money is a scarce resource. There are only so many dollars in circulation, and this scarcity means that people must work hard to earn them. The same goes for other forms of currency: there are only so many francs or euros in circulation, and they’re worth something because they’re very difficult to come by.
Bitcoin also has scarcity built into its design, there will never be more than 21 million bitcoins, but unlike traditional currencies, Bitcoin can be easily divided into small pieces called satoshis (or “bits”). Each satoshi represents 0.00000001 bitcoin (one hundred millionth of one bitcoin), which makes it possible to send fractions of bitcoins to someone else over the internet without incurring fees from banks or other intermediaries. You can check out Bitcoin mining-specific hardware on AsicMarketplace.
In fact, because these fractional amounts are so small in value and so easy to transfer from one person to another over the internet without fees, it’s possible for millions of people around the world to send each other small amounts of money whenever they want without having to worry about going through any bank or government intermediary.
What is Proof of Work in Bitcoin Mining?
Proof of work (PoW) is the way that miners verify transactions on the blockchain. Miners are in charge of verifying transactions, but they also compete to do so first in order to win a prize. This is where the phrase “mining” comes from. It’s basically like digging for gold, except instead of digging into the ground, you’re digging through complicated math problems.
The goal of mining is to find a hash (a mathematical equation) that matches an arbitrary number known as a target. The difficulty of this task depends on how much processing power has been thrown at it by miners who have already found hashes that match the target. If you want to know more about how this works technically, read our guide on how bitcoin mining works and why it’s necessary for the network.
Why Does Bitcoin Need Proof of Work?
The proof-of-work system that bitcoin uses is designed to make it costly to produce blocks, ensuring that people have a strong incentive to include transactions in their blocks.
Bitcoin uses a proof-of-work system similar to Adam Back’s Hashcash with some modifications. The main difference between Hashcash and Bitcoin’s PoW is that Bitcoin adds an extra input to the hash function, which is called the block header. Each block has a unique 256-bit identifier called a “hash”, which serves as a fingerprint for that particular block. Using this hash as an input makes it more difficult to find a nonce that works because there are more inputs compared to usual hash functions (SHA256). This makes brute-forcing the nonce infeasible unless you have an ASIC rig or other specialized hardware.
Proof of work was introduced as an alternative to proof of stake, which is another method that cryptocurrencies use for reaching consensus and adding new blocks to the blockchain. Proof of work tends to be more energy efficient than proof of stake, but it is also more centralized because it requires specialized hardware such as ASICs (application-specific integrated circuits).
Proof of stake, on the other hand, uses virtual mining rigs (known as staking) that don’t require specialized hardware. This means that anyone can participate in the process if they hold enough tokens, but it also makes it easier for someone with lots of tokens (such as exchanges) to control the network.
Energy Consumption for Mining a Bitcoin
Bitcoin mining consumes an estimated 30 terawatt-hours of electricity per year, which is roughly equivalent to the entire energy consumption of Lebanon.
The high energy consumption of Bitcoin mining is a major contributor to its carbon footprint. The most common way to mine Bitcoin is using ASICs, which are powerful chips that work well with the SHA-256 algorithm but use a lot of power. Simply find and compare Bitcoin ASIC miners in market based on the SHA-256 algorithm, and get the most suitable fit for you as per budget, power, and hash rate.
Another way to mine Bitcoin is by using GPUs, which offer much better energy efficiency than ASICs. Unfortunately, GPU miners are now so far behind ASIC miners that it’s no longer profitable for them to compete for blocks. As a result, GPU miners have largely moved on to other cryptocurrencies like Ethereum and Zcash.
Bitcoin Mining to Be More Energy Efficient in The Future!
As of now, Bitcoin mining is very energy intensive, as it uses a lot of electricity and computing power. As the price of bitcoin fluctuates, so does the amount of energy miners use to verify transactions. Miners earn money in exchange for their services, just like any job.
It’s not surprising that many people are concerned about how much energy the bitcoin network consumes and how much carbon dioxide it emits into the atmosphere. Some people even think this might be enough to destroy our planet!
However, there are many ways to solve this problem and make mining more sustainable. Here are some ideas that could make mining less wasteful:
1). Use Renewable Energy Sources
One way to reduce your carbon footprint is by using renewable sources of power such as solar or wind power. These types of energy can be used without creating pollution or harming the environment while still being cost effective at producing power for your home or business. You can also choose an eco-friendly location for your mining operation like Iceland where there are plenty of geothermal resources available to use as an alternative source of energy which means less demand on traditional fossil fuels like coal and oil which pollute our air and oceans with greenhouse gasses like CO2.
2). Distributed Energy Generation
In the next decade, distributed generation will be widely adopted. This means that instead of relying on large power plants, people will be able to generate their own electricity with solar panels or wind turbines.
The adoption of distributed generation will make Bitcoin mining more efficient. Why? Because it will reduce the number of miners who need to spend money on power generation. Right now, every miner has to buy a lot of electricity from a power plant to mine Bitcoin efficiently and profitably. In the future, most miners will be able to produce their own clean energy locally and sell any excess back into the grid at a profit.
3). Reduction In The Waste of Idle Energy To Bare Minimum
With new technologies and techniques, we’ll be able to create new forms of energy from waste that is currently being wasted. The future of waste is to use it as a resource.
In the 2040s, we are expecting to have perfected the art of converting waste into usable energy. We’ll no longer be dependent on fossil fuels, nuclear power plants or wind turbines instead, we’ll be using garbage from our homes and businesses as fuel for our vehicles and other machines.
How is Bitcoin Mining Moving Towards Creating Abundance?
The energy revolution is going to be a game-changer. The transition from fossil fuels to renewable energy sources is happening at an unprecedented pace. It’s not only a technological revolution, but it’s also a social and economical one that will bring about massive changes in our society.
The new decentralized energy market has the potential to disrupt the old centralized system, which was built around large-scale power plants and transmission lines that deliver electricity to consumers. This structure is inefficient and expensive. By contrast, the new decentralized system leverages blockchain technology to allow users to trade electricity across borders with minimal transaction costs and no intermediaries required.
It will become more energy efficient by storing the idle energy and then repurposing it for other purposes. This will lead to a reduction in energy waste backed by an efficient way of circulating and utilizing the available electricity or energy.
Conclusion
With bitcoin mining, there are two main sources of scarcity: the limited amount of bitcoins that can be mined and the amount of work required to mine them. But as mining evolves into a renewable source, we’ll see the creation of abundance in all kinds of areas: abundant energy, currency, and resources. With bitcoin mining moving ever closer to being a truly renewable energy source, it’s making strides towards becoming a truly abundant resource.