There is no denying that investing in Bitcoin and other cryptocurrencies is, at this moment in time, one of the most attractive and lucrative investments that can be made, surpassing traditional fiat investments in stocks and shares and precious metals such as gold.
Currently, Bitcoin is sitting at an all time high, meaning its value is the most it has ever been, £34.541 to be precise. Bitcoin can be brought and mined, and its value relies heavily on the amount of it available to buy. Increased demand for it with fewer quantities of it available to buy on the market drives its value up.
The graph above reflects the historical price of Bitcoin and demonstrates its growth from strength to strength. The value of Bitcoin has exploded over the pandemic. One of the reasons for this is due to an influx of investors coming from large-scale institutions. Bitcoin has also made leaps towards becoming more mainstream, making it easier to invest into, sell and even spend.
Investing in notoriously volatile virtual currency can take investors on a hell of a rollercoaster ride with great rewards and significant risks. Many investors use it for different reasons, some to purchase supercars, other holidays, and others as pension plans.
However, the nature of Bitcoin and its mining process means hunting for new coins requires using the most powerful technology and computers around. These include fast chip processing technology like Qualcomm and Snapdragon chips found in today’s smartphones. Computers for mining cause a surge in energy use. As the demand for Bitcoin increases, this is not good news for the environment.
Research from Cambridge University has suggested that the use of Bitcoin annually is using more electricity than Argentina. While users mine for Bitcoin, their electricity bills can reach shocking and alarming rates.
Powerful computers and calculations to verify transactions make crypto-currency power draining. The research conducted suggests Bitcoin mining consumes around 121.36 terawatt-hours a year. This figure is unlikely to reduce unless the popularity and value of Bitcoin decrease.
The rising price and appeal make Bitcoin more of an incentive for miners, which will lead to an increase in machines in use. Hence, as the price increases, so will energy consumption. With this in mind, what can Bitcoin do to become greener?
Can Bitcoin go Green?
One of the best and quickest ways of fixing the power used during the mining process is to use solar power and a range of other green energy sources that are now available for use, such as wind turbine electricity. Several commercial services have the ability to make this change possible for only powering crypto mining on server farms that are built only to use clean energy, which is renewable.
With Bitcoin came its useful and widely applicable technology, Blockchain, which has been implemented in many different industries, as indicated by the image below.
For this reason, it is worth incentivising green energy for its use and future. New Blockchain technologies could also offer new incentives to miners, which will make them want to use it. This strategy will eventually force out miners who are polluting the environment.
Many new Blockchain systems are changing their way and now use ‘Proof of Stake‘ (PoS) systems that rely on market incentives. The owners of these are called validators instead of miners. The validators put a deposit down known as a ‘stake’, a large chunk of crypto which allows an exchange to add blocks to the Blockchain.
In traditional Blockchain, miners work against each other to see who can solve the problem in exchange for a reward, which eats up large amounts of energy. However, in PoS, validators are shown by an algorithm that takes their ‘Steak’ into account. This removes competition and saves energy overall. Working this way also allows each machine in the system to work on solving only one problem at a time, saving energy. Ethereum is already working on a PoS system.
Considering all the ways that investors can get their hands on some crypto today, one company has become creative and takes a less traditional approach. Crypto Candles are Soy wax candles that come in a range of different scents and offer a fun perspective to crypto. As the candle burns and the wax reduces, it reveals a surprise QR code hidden in the wax. Upon retrieval, the user could win investments in crypto or cash.