The UK’s electricity consumption is a little over 300 TWh a year, while Argentina uses around the same amount of power as the CCAF’s best guess for Bitcoin. And the electricity the Bitcoin miners use overwhelmingly comes from polluting sources. The CCAF team surveys the people who manage the Bitcoin network around the world on their energy use and found that about two-thirds of it is from fossil fuels….
We can track how much effort miners are making to create the currency. They are currently reckoned to be making 160 quintillion calculations every second — that’s 160,000,000,000,000,000,000, in case you were wondering. And this vast computational effort is the cryptocurrency’s Achilles heel, says Alex de Vries, the founder of the Digiconomist website and an expert on Bitcoin. All the millions of trillions of calculations it takes to keep the system running aren’t really doing any useful work. “They’re computations that serve no other purpose,” says de Vries, “they’re just immediately discarded again. Right now we’re using a whole lot of energy to produce those calculations, but also the majority of that is sourced from fossil energy.”
The vast effort it requires also makes Bitcoin inherently difficult to scale, he argues. “If Bitcoin were to be adopted as a global reserve currency,” he speculates, “the Bitcoin price will probably be in the millions, and those miners will have more money than the entire [U.S.] Federal budget to spend on electricity.”
“We’d have to double our global energy production,” he says with a laugh. “For Bitcoin.”
Ken Rogoff, a professor of economics at Harvard and a former chief economist at the IMF, tells the BBC that Bitcoin exists almost solely as a vehicle for speculation, rather than as a stable store of value that can be easily exchanged.
When asked if the Bitcoin bubble is about to burst, he answers, “That’s my guess.” Then pauses and adds, “But I really couldn’t tell you when.”
Read more of this story at Slashdot.