8 billion people on Earth and only 21 million Bitcoins. What does the future look like?
By Marius Morra, CEO and Co-founder of TOKERO Crypto Exchange
Bitcoin and its environmental impact
Bitcoin mining is the process of creating new Bitcoins and adding transactions to the public ledger. Mining Bitcoin requires computing power, and that power requires energy. The amount of energy required to mine Bitcoin has increased significantly since its inception. In 2020, the estimated global energy consumption for Bitcoin mining was over 105 terawatt-hours (TWh), exceeding the energy consumption of many small countries.
Bitcoin mining consumes more energy than traditional money transfer services such as credit cards and payment systems. This is due to the verification requirements of all transactions made through Bitcoin, which requires a powerful network of computers to solve complex mathematical problems. As the number of miners competing to solve these problems and obtain Bitcoin increases, so does the energy required to power the network.
The vast majority of energy consumption associated with Bitcoin mining comes from non-renewable sources such as coal and gas. This is because these sources are cheaper and more readily available than renewable sources such as solar and wind power. This means that the energy used to power the grid contributes significantly to the planet’s carbon footprint.
As Bitcoin becomes more widely adopted, the energy consumption associated with it will continue to increase. This is because the computing power required mining Bitcoin increases with the rate of adoption. This means that Bitcoin’s environmental impact will only get worse as more people use it.
Bitcoin’s environmental impact isn’t just limited to emissions from energy consumption for mining operations. There is also a large amount of waste associated with mining hardware such as CPUs and cooling systems. This is because most miners upgrade their hardware periodically to increase their efficiency. This hardware is sometimes abandoned, contributing to the high levels of e-waste around the world.
Potential solutions for mitigating Bitcoin’s environmental impact
There are several potential solutions to mitigate Bitcoin’s environmental impact. One of these is to create incentives for miners to use renewable energy sources such as solar and wind power instead of non-renewable sources such as coal and gas. Companies like Australia’s Harby Farms and Serbia’s SolarHydro have already switched to renewable energy sources for their Bitcoin mining operations.
In addition, governments and technology companies could establish rules and guidelines to set goals and limits on the energy consumption associated with Bitcoin mining. For example, the Chinese government recently imposed new restrictions on the amount of energy that can be used for mining operations.
The future of Bitcoin and its impact on society
Possible scenarios for Bitcoin’s future trajectory
The future of Bitcoin is still uncertain and its trajectory could take several paths.
One possible scenario is that Bitcoin becomes a much more widely accepted form of payment around the world, just like traditional currencies. As businesses begin to accept Bitcoin as a payment option, its value and popularity could increase significantly.
In the second scenario, Bitcoin could become the largest investment opportunity known globally. After 13-14 years from the first commercial transaction, Bitcoin is the best performing investment asset.
The main opportunity for Bitcoin lies in its potential for increased use as a form of payment and its potential to propel cryptocurrencies into the mainstream. With more businesses accepting Bitcoin as a payment method, it could become a more viable option for many people. The rise in popularity of blockchain technology and its potential applications have also given Bitcoin a boost and its future looks bright.
