When people talk about currency, they used to be referring only to dollars, yen or any other form of money issued by a world government. But in recent years, cryptocurrency has entered into the equation and it has gained serious momentum in the global marketplace. Cryptocurrency exists only online, and many experts fear that the growing popularity of cryptocurrency is going to eventually harm the world’s electricity supply.
What Is Cryptocurrency?
Normal currency is regulated by national banks that track the currency and keep the volume of currency in circulation at an acceptable level. It is up to the banks to help maintain the value of a currency and take steps to prevent its devaluation.
Cryptocurrency exists only online and its value is based on the secure systems used to verify transactions. Bitcoin is the most popular cryptocurrency and it relies on complex mathematical problems solved by miners to verify transactions.
How Mining Works
When a Bitcoin transaction occurs, it is locked with other transactions into a block of data. In order to verify that block of transactions, people called miners must solve a complicated mathematical problem attached to the block. When the problem is solved, the miner is rewarded with Bitcoins and the block is added to a chain of other verified blocks called a blockchain.
The blockchain is the log that is hosted on miners’ computers to maintain the integrity of Bitcoins. All other cryptocurrencies use the same process, which is causing a concern around the world regarding rising electricity rates.
Electricity And Cryptocurrency Mining
The mathematical computations that miners have to do are extremely complex and require large groups of powerful computers to complete. Along with the electricity drawn by the computers, there is also the power used to keep all of those computers cool. When the numbers are put together, they show that Bitcoin miners use more energy in one year than the entire country of Ireland.
At the rate miners are going, they are going to cause a global spike in electricity rates that could cause a variety of problems, but that is not the only concern miners create. It is estimated that if the miners do not start adopting more energy efficient methods, then Bitcoin miners alone will be utilizing 100 percent of the world’s electricity supply by February 2020. The truly scary part is that Bitcoin is only one of many cryptocurrencies using up the world’s energy supply.
What Can Be Done?
The second most popular cryptocurrency is called Ethereum and the group that monitors that cryptocurrency is starting a new authorization process in 2018 that will use considerably less energy. Sony has been working on a way to authorize blocks of transactions using smartphones without draining their batteries.
Both Bitcoin and Ethereum each require more energy to do their calculations than are used by many countries around the world. Even if Ethereum’s new process is successful, Bitcoin has not indicated whether or not it will change the process to be more energy efficient too. This issue is a primary concern among those who monitor the world’s energy supply and the investors who are currently making fortunes investing in cryptocurrencies.
If you are interested in even more cryptocurrency-related articles and information from us here at Bit Rebels then we have a lot to choose from.