The Bitcoin is an environmental catastrophe "
“ Bitcoin is killing the planet”
“ Bitcoin will soon shut down the Internet”
These are just a few of the anti- Bitcoin headlines that have toured the internet and the media in recent years. And while many cryptocurrency fans would love to criticize each of them, there is a core of truth in each of these dramatic titles.
The fact is, despite halving the number of older, ineffective miners from withdrawing from the crypto market, the mining industry continues to spend significant amounts of computing power, contributing to huge increases in its scales of energy consumption. In fact, some reports suggest that at the time of publication, Bitcoin's energy consumption is equal to that of Israel.
However, contrary to what one would expect, a ten million fold increase in energy consumption and a ten billion increase in hashing activity since 2010 has not been accompanied by a corresponding increase mining costs in relation to the volume of transactions. At least, that's what a recent article titled, "The cost of mining Bitcoin has never really gone up," argued.
The document in question "estimated the lower limit of the global cost of energy for a period of ten years from 2010, taking into account the evolution of oil costs, improvements in hashing technologies and hashing activity ", before concluding that contrary to popular expectations," The cost relative to the volume of transactions has not increased or decreased since 2010. "
This is a crucial finding because, as the study points out, proof of work is a very expensive process, a necessary evil that must represent a significant fraction of the value that can be transferred to the blockchain to avoid double attacks spent. So expensive? Well, the document states that at least $ 1 billion is burned by the Bitcoin network each year for proof of work. However, although this number is high, it should be much higher. At least that's what the authors of the article claim.
According to their research, the cost of proof of work is not at all high, or even remotely close to its high level to protect against double-spending attacks. However, as pessimistic as it may seem, he also highlighted the fact that beyond the proof of work, there are other infrastructure-related obstacles to such attacks, namely the costs of operation of equipment and facilities.
Even if we assume that these are overcome, think about it rationally. As soon as such an attack is detected, it is likely that the value of Bitcoin will collapse. Why would an attacker risk not recovering his investments in mining equipment?
Proof of work is therefore not the only obstacle to such attacks. There are others. Alas, this should not ignore the fact that PoW costs only 0.5% of the transaction volume on the Bitcoin network , a very small fraction.
Getting back to the power consumption aspect of bitcoin mining , it should be noted that most of the online coverage for cryptocurrency comes from Digiconomist, an independent portal. However, there is still skepticism about the validity of the portal data.
For example, Digiconomist has been accused of inventing sources. Just check out its comparison of Bitcoin's energy consumption to independent nation states around the world. Although the source of the graph says BitcoinEnergyConsumption.com, clicking on it instead redirects it to the Digiconomist website
