Hello dear Steemians,
I am doing my master's degree in the energy department, and I am constantly researching this subject. Since the day I signed up for Steemit, I have tried to mention the energy market in my posts. However, I realized that this was not enough, and I established this community. I see that every subject is freely shared at Steemit. In this context, I decided to convey fossil fuels and renewable energy developments through this platform.
I wanted to dedicate my first post on my @RenewableSteemit platform to Bitcoin's electricity consumption. As we follow from the latest developments, it is known that Bitcoin consumes more electricity than some countries. However, it is a matter of debate that the source of this electricity consumed is mostly fossil fuels. I will give information about Bitcoin's electricity consumption with a few graphs.
Introduction
Currencies such as gold and silver have been used for thousands of years. People then started using paper money. Paper money, which had been in circulation for many years, operated as the essential financial market instrument. However, these currencies managed from a single-center have many weak points. A decentralized system has been developed to get rid of these weak points. Blockchain technology pioneered the prominence of decentralized systems. Bitcoin was launched as the first concrete example of this technology. We know that Bitcoin not managed by central authorities such as governments or central banks.
Is Bitcoin perfect in every way? No. Because most of the electricity used in Bitcoin is produced from fossil fuels. In this article, I will talk about the energy-bitcoin relationship.
Relation Between Energy and Bitcoin
Bitcoin is an electronic currency that has become increasingly popular was introduced in 2008 by Satoshi Nakamoto. Since a transaction-intensive algorithm is created in Bitcoin mining, a high amount of energy is required. Bitcoin is a virtual currency that has no physical representation, such as coins or banknotes. Anyone with sufficient technical equipment and knowledge can mine bitcoin. The most significant source of this energy is electricity. A high amount of electrical power is consumed while mining and the source of this electricity is one of the most discussed issues today.
Figure 1. Bitcoin Energy Consumption
Source: Diginomist
When we look at the energy resources used in electricity generation, coal takes the first place (Figure 2). I think Elon Musk ended the Bitcoin-Tesla relationship by looking at such a graph. Fossil fuels constitute the most important source of electricity generation. However, in recent years, electricity has also been produced from renewable energy sources (wind, solar). Many countries are investing to increase their renewable energy consumption. Countries have begun to reduce the share of fossil fuels in electricity generation to change this graph. However, the source of electricity used in Bitcoin is derived from fossil fuels. As fossil fuels continue to be used, the debate on this issue will continue.
Figure 2. Electricity Production by Source, World
Source: Our World in Data
As income from block mining increases, people from all over the world are turning to Bitcoin mining. People trade with high-performance computers to earn income this way. Over the years, as the Bitcoin price has increased, the number of investors has also increased. People started to invest in different cryptocurrencies besides Bitcoin. This situation brought about the need for more technical equipment. Each new computer means more electricity consumption. In this context, the total energy consumption of cryptocurrencies increased as the total energy consumption increased. Just looking at Bitcoin, we can see that it consumes more energy than a few countries. If Bitcoin was a country:
Figure 3. Energy Consumption by Country (Annualized TWh)
Source: Diginomist
Conclusion
As a result, the world economy continues to grow, and energy consumption increases as it grows. Currently, investment in renewable energy sources is insufficient. Therefore, electricity consumption from fossil fuels will continue to increase. In the Bitcoin production process, electricity from fossil fuels will continue to be consumed. As a solution, the Bitcoin market needs to increase investments in renewable energy. It should also lead to raising awareness on this issue.
My motto:
more clean energy - more sustainable cryptocurrency
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