Bitcoin mining uses an unnecessary amount of electricity, and 98% of Bitcoin miners never win the Bitcoin block reward, so says a report compiled by PwC’s “Blockchain Specialist”.
According to the report published in British newspaper The Telegraph, a Bitcoin transaction uses the same amount of electricity as a typical British household does in 2 months.’
Blockchain specialist, Alex de Vries, who compiled the report, claims that of the miners burning the electricity, only 2% of them will ever discover a block, meaning a staggering 98% never get to win the block reward.
But is he missing the point of Bitcoin mining and its power hungry machines?
The Bitcoin mining machines are very expensive and do use a lot of electricity, but it’s not an unnecessary requirement.
Bitcoin gives us a secure, store of value that is portable, divisible, programmable, and best of all needs no trust.
The miners doing the hard graft burn a lot of electricity to secure the network and hopefully earn at least some of the block reward.
What is the Bitcoin (BTC) Block Reward?
The Bitcoin block reward is the BTC that is paid out to the miner whose powerful mining equipment works out the difficult cryptographic equation and earns the right to add the newly hashed block to the Bitcoin blockchain.
To be in with a chance of winning the rights to add the new block to the chain, miners must have high-end mining equipment capable of competing against other machines with high hashrate capabilities.
At the moment, the block reward is 12.5 BTC, and at today’s rate that is worth $110,187. With this reward being dished out every ten minutes to one of hundreds of thousands of miners, it’s understandable why anyone invests in the lucrative mining gear.
However, those with less powerful equipment are much less likely to successfully discover a block and earn the block reward.
PwC’s de Vries says, ‘it’s impossible for 98% of the devices during their lifetime to make the calculation that actually results in a reward. So the rest are just running pointlessly for a few years, using up energy, and producing heat.’
He goes on, claiming ‘the carbon footprint of a single transaction is the same as 780,650 Visa transactions or the same as somebody spending 52,043 hours watching YouTube.’
Miners Can Easily Join Mining Pools To Work Together
Although de Vries has a point when it comes to less powerful rigs being unlikely to win the block reward, he completely ignores the fact that they can join mining pools.
Joining a mining pool, elevates any miners' chances of winning a share of the block reward.
Although the miners won’t win it alone (not many will), the mining pools do make it possible for the average person to earn some of the block reward. On top of this, their mining machines are also helping to secure the network with a higher hashrate.
So, they aren’t wasting their time, and aren’t wasting electricity, and are earning a block reward for their contribution to the hashpower of the network.
Related Reading: 5 Profitable Altcoins To Mine in 2020
Securing Anything Valuable Requires a Lot of Power
It goes without saying that the electricity required to mine Bitcoin is a lot. That said, the biggest mining farms are being built next to power grids, and are now using electricity that would otherwise go to waste. And many say the need for cheaper energy to mine Bitcoin is promoting renewable energy research.
What is completely lost on PwC’s “Blockchain Expert”, however, is the fact that the cost of making and storing fiat money is incredibly high, too. Printing, transporting, verifying, storing fiat currencies all takes so much energy and manpower, it makes Bitcoin’s energy consumption miniscule.
And that’s just the physical notes and coins they make. What about all the digits they create, and the problems that brings to societies? With Bitcoin you can’t print at will.
Gold, too: How much does it cost to store gold, or send it half way around the world? A very costly and dangerous asset to keep if you have a lot of it. With Bitcoin, these risks and logistical nightmares are eradicated.
It’s not difficult being a “blockchain expert” for PwC, and getting mainstream media to publish your propaganda. What is difficult, however, is that people are paying to read it and The Telegraph is highly regarded in Britain.
Nobody is saying the electricity consumption isn’t a lot, but with Bitcoin we have the hardest and soundest money in the world. We have the most secure network in the world, and one that requires no trust.
With Bitcoin we have a money that cannot be manipulated and a money that every single fraction of it is worked for. It can’t be printed at will and is not controlled by anybody. For me, the effect Bitcoin might have on the world population is justification for its electricity usage.
Author: Tommy Limpitlaw