Bitcoin is definitely having a ‘moment’. Currently sitting around $9,000 AUD, the first cryptocurrency has had a wild ride from humble beginnings in 2009.
It has weathered its fair share of scandal. Hacking attempts, bans from various countries and strongly worded protests from the financial industry, have all failed to stop this juggernaut in its tracks.
But could this latest news be bitcoin’s final undoing?
A Motherboard article has exposed the outrageous electrical bill the currency has racked up. Funnily enough, it could be the rising popularity that brought this issue to life.
The heavy duty computers needed to mine bitcoin, require a huge amount of energy to power them. An index from Digiconomist estimated that miners could use more electricity per annum than Nigeria uses in a full year, JUST to mine bitcoins.
In fact, according to that same report, ‘…each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.’ Motherboard calculated that 821,940 homes could be powered by the amount of electricity used by worldwide mining of bitcoins.
And it isn’t just bitcoin. This applies to most cryptocurrencies hitting the world stage. According to Vice, ‘Ethereum is now consuming a small country’s worth of electricity.’
Obviously, this rate of consumption is much higher than other digital payment methods like PayPal. And while there are alternatives, this is another battle for the crypto-crew. They need to find a reasonable solution to the energy issue, or risk losing their new glory to old favourites.
Australia is already struggling to keep up with energy demand. And with bitcoin gaining more and more traction, this could be a tipping point for Australia’s energy supplies.
Elon Musk warned late last month that if Australia did not find a more renewable energy source, it would be ‘into the dark ages we go’.
This could go two ways.
Either Australia (and the rest of the world) need to look at implementing smarter energy supplies, or bitcoin could be seeing the start of the end.
PS: While bitcoin may be a current issue for energy demands, the crypto has gone through many controversies, which has in turn cause drops of 30%. However, the coin has been able to fix any problems that have arisen quite quickly and turn it around to make gains of 100%. To find out more about bitcoin and other smaller cryptocurrencies check out Sam Volkering’s Secret Crypto Network, here.