According to a recent blog post by Unchained Capital (a financial company that offers cryptocurrency owners cash loans secured by their assets), in the long run, high energy consumption by bitcoin outweighs the negative impact on the climate and environmental pollution. By the way, so far both arguments have not received serious confirmation.
According to the company’s research, still “wasteful” energy consumption is advisable from the point of view of building a more stable economy compared to the existing system, which is prone to human errors, leading to a sad end.
The study focuses on the ongoing Venezuelan financial crisis, and also emphasizes the possibility of its recurrence in many countries with similar financial structures.
When bitcoins are transferred from one wallet to another (this is called a transaction), they are checked by many computers that sign the transaction and add it to the blockchain. These servers consume a lot of power, and to perform round-the-clock work, they require huge computing power.
This is where most of the energy is spent. For example, at a transmission speed of 75 bits per second, the Bitcoin network consumes approximately 7-8 GW of electricity, which approximately corresponds to $ 9 million per day ($ 3.3 billion per year), based on an approximate cost of $ 0.05 per kW / h. It turns out that the Bitcoin network consumes as much energy as approximately 6 million homes in the United States.
Nevertheless, traditional centralized financial institutions controlled by states cannot be called an optimal alternative. Unlimited issuance of fiat money allows the government to manipulate currencies, take at least a trade war between the US and China, which is accompanied by serious financial manipulations.
In this regard, it can be assumed that centralized financial systems controlled by humans are significantly unreliable compared to a decentralized and “energy-intensive” work model.
“If BTC prevents hyperinflation, an example of which we are now seeing in Venezuela, energy consumption will be the best solution in the history of mankind,” said Bitcoin economist Saifedin Ammus.