There Is Nothing Virtual About Bitcoin’s Energy Appetite
- 6 years ago
There Is Nothing Virtual About Bitcoin’s Energy Appetite
The lure of new Bitcoins encourages people to use lots of fast computers,
and lots of electricity, to find the right answer and unlock the new Bitcoins that are distributed every 10 minutes or so.
But the rules of the network dictate that as more computers join in the race, the algorithm automatically
adjusts to get harder, requiring anyone who wants to compete to use more computers and more electricity.
But many virtual currency aficionados argue that the energy consumption is worth it for the grander cause of securing the Bitcoin
and Ethereum networks and making a new kind of financial infrastructure, free from the meddling of banks or governments.
In the 2008 paper that first described Bitcoin, the mysterious creator of the virtual currency, Satoshi Nakamoto, wrote
that the system was designed to thwart a “greedy attacker” who might want to alter the records and “defraud people by stealing back his payments.” Because of the mining and accounting rules, the attacker “ought to find it more profitable to play by the rules.”
The rules have kept attackers at bay in the nine years since the network got going.
That creates the incentives for cooperation.”
This dispute has its foundations in the complex systems
that produce tokens like Bitcoin; Ether, the currency on the Ethereum network; and many other new virtual currencies.
The total network of computers plugged into the Bitcoin network consumes as much energy each
day as some medium-size countries — which country depends on whose estimates you believe.
The lure of new Bitcoins encourages people to use lots of fast computers,
and lots of electricity, to find the right answer and unlock the new Bitcoins that are distributed every 10 minutes or so.
But the rules of the network dictate that as more computers join in the race, the algorithm automatically
adjusts to get harder, requiring anyone who wants to compete to use more computers and more electricity.
But many virtual currency aficionados argue that the energy consumption is worth it for the grander cause of securing the Bitcoin
and Ethereum networks and making a new kind of financial infrastructure, free from the meddling of banks or governments.
In the 2008 paper that first described Bitcoin, the mysterious creator of the virtual currency, Satoshi Nakamoto, wrote
that the system was designed to thwart a “greedy attacker” who might want to alter the records and “defraud people by stealing back his payments.” Because of the mining and accounting rules, the attacker “ought to find it more profitable to play by the rules.”
The rules have kept attackers at bay in the nine years since the network got going.
That creates the incentives for cooperation.”
This dispute has its foundations in the complex systems
that produce tokens like Bitcoin; Ether, the currency on the Ethereum network; and many other new virtual currencies.
The total network of computers plugged into the Bitcoin network consumes as much energy each
day as some medium-size countries — which country depends on whose estimates you believe.