thecoinrepublic.com
- Since Bitcoin has risen to prominence, the media has attacked the crowned asset based on its power consumption.
- As per The Guardian, one Bitcoin transaction utilizes a similar amount of energy that a common American household uses in a month.
- Considering that we have crossed 2020 and Bitcoin mining has not burned up each of the resources, we should ask what’s the cause behind this false narrative.
Bitcoin Is Efficient
Initially, we should debunk this myth that Bitcoin is not efficient than the present monetary system. An instance of this well liked misconception comes from Forbes, “1 Bitcoin transaction equals 750,000 Visa swipes.” problem with this statement is that it is not scaling the same thing.
In the present fiat system, there are 3 layers. Initial layer is the “high retail performance” layer, which is promisingly efficient. This layer is where electronic as well as credit card transactions occur.
However, this layer functions above the “banking and fintech” layer, which is not so efficient. This second layer consists of fintech organizations as well as banks. They offer security for our funds, record how much money everyone has and handle the activity in a high retail performance layer.
This layer also functions above another layer, the “government regulatory” layer, which is astoundingly efficient. This third layer is concise of government institutions such as the military and Federal Reserve. They enforce USD’s value and use, mobilize the money, print it, engage in military conflicts for USD’s promotion and more.
As of now, Bitcoin has a couple of layers: The base layer and the Lightning Network. Lightning Network is similar to “high retail performance” layer of fiat system, but better. It can manage myriad of e-transactions per second, way more than Visa, inexpensively and efficiently.
Since the blockchain does not require government apparatus, has Lightning network and few layers, it is worth thinking that which is better, our present fiat system or Bitcoin.
ALSO READ – How much is the latest bitcoin dip affecting Michale Saylor’s Microstrategy?
Energy Consumption by Bitcoin
Profit margin on Bitcoin mining is too thin. Miners can only afford to pay $0.02 to $0.05 per K/W, so they have to discover inexpensive sources of power for their machines.
These sources tend to be in remote locations all over the globe, distant from prime cities, and often utilizes hydroelectric, geothermal, solar, and wind energy. These sources generate inexpensive energy because the majority of power is wasted. So when miners establish a shop next to such power plants, they aren’t stealing the power from anyone.
It is worth considering that majority of listed power sources are green.
3 quarters of Bitcoin’s energy utility is green, rendering it among the most renewable driven sectors. So, Bitcoin mining is incentivizing growth of green energy sector and is assisting reduced carbon emissions in a long run.