Greener Roads to Bitcoin and Mining
By Samyukta Narasimhan, Content and Growth Strategist at Moving
Bitcoin has been getting battered for the last few weeks and going through a major slump with barely any momentum. Why? Because BTC is under permanent scrutiny for environmental issues? However, Bitcoin by implication is among the most green technologies ever invented!
All this criticism while the carbon footprint of fiat money remains much higher than that of crypto! It would take between 500–1,000 years for Bitcoin’s energy use to even approach the level of damage that the printing of fiat money did, during the 2008 financial crisis. Central banks are vastly more polluting and damaging than Bitcoin. If Bitcoin through decentralization, is able to slightly even reduce central banks’ ability to cause recessions, it could pay back every watt many times over. For example, if Bitcoin reduces the odds or magnitude of central bank recessions by just 2%, Bitcoin would actually save us far more energy than it uses — it would be net carbon negative.
Given that we live in a world of irresponsible corporations, that play with the value of the dollar by drawing and dumping funds into the economy. Bitcoin and other decentralized currencies can only be the ultimate saviour that shields us from enormous energy waste and the human cost of rebuilding our economy over and over again.
But what is in store for the king of coins? When will BTC pick up again?
Finally, a silver lining
Mining difficulty for the world’s largest, and most valuable, cryptocurrency just dropped by more than a fourth. This means it is now easier and more profitable to mine Bitcoins.
Active bitcoin miners may see their profitability double following the 28% downward difficulty adjustment in mining on July 3. The North American hash spread — an index to measure the difference between bitcoin mining revenue per megawatt-hour and the cost of the needed power — has almost doubled to $449 from $225.
With China shutting down the mining rigs, there are fewer miners in motion, which in turn means fewer transactions are verified. Reports said that while it used to take about 10 minutes to complete a block, a reduction in mining activity has meant that it now takes between 14 to 19 minutes to add a block. This is why Bitcoin can adjust the difficulty level for mining blocks after every 2016 blocks are added. As you know there is no central body governing or controlling the difficult levels of mining, it is determined by the network itself to support its decentralized nature.
Another such improvement upon Bitcoin’s mining principles, it will adopt “Proof of Stake” protocols, which require that people must have a stake in the blockchain to be able to verify transactions. By doing away with mining, proof of stake is expected to save much of the energy that now goes into creating cryptocurrency tokens.
More energy-friendly means less criticism means less red flags on Bitcoin. This could lead to more and more financial institutions, companies, governments, and individuals opening up its doors to crypto in the long run.
The biggest problem with Bitcoin is the energy consumption concerns that are pulling it down, but soon enough we will be sure to see hockey stick charts and positive returns again!
So will you succumb to the pressure of the lows or keep HODLing?
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