Cryptocurrency the Latest Energy Suck

Cryptocurrency the Latest Energy Suck

Returning to the airport in Iceland a few years ago I remember driving through a "town", quickly built to support cryptocurrency mining.  For such a beautiful country this place was ugly, but I remember thinking it makes sense. Iceland's inexpensive geothermal power and cool climate help keep mining farms relatively inexpensive to run, and still trying to recover from the 2008 financial crisis I understood the country's embrace to boost jobs and their economy.

Fast forward to 2018 and according to a KPMG report, 90% of the power consumption of Iceland's data centers was for crypto mining, with only 360,000 inhabitants it is not inconceivable to exceed the power required to heat homes, but still. How is that even possible? Warehouses filled with mining rigs comprised of graphic cards run 24/7 and require cooling systems to avoid overheating. A great article in Cnet breaks it down. A rig with three GPUs can consume 1,000 watts of power, equivalent to a medium-size window AC unit turned on. Kazakhstan has one location with 50,000 mining rigs.

The Bitcoin Energy Consumption Index estimates that Bitcoin mining uses more energy than Argentina!

Bitcoin Energy Consumption Index Annualized

Bitcoin Energy Consumption Index Transaction

Is cryptocurrency going the route of big tech data centers discussed last week investing in clean energy to support their energy consumption? According to a study by The University of Cambridge that does not appear to be the case finding 70% of miners based their decision on what coin to mine on the daily reward amount and only 30% considered energy consumption.  

Ethereum 2.0 is implementing a proof of stake upgrade that will reduce energy consumptionCardano is also implementing a proof of stake protocol and  touted as the environmentally friendly cryptocurrency its value went up significantly, but is it all worth it?  Does the world even need cryptocurrencies in the first place? Let us know what you think in the comments below.

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Inspiring Reads -

Cryptocurrency - Who, What, Why, Where, How?

 Mastering Bitcoin: Programming the Open Blockchain - 2nd Edition

 Mastering Bitcoin: Programming the Open Blockchain - 2nd Edition
by Andreas M. Antonopoulos

Join the technological revolution that's taking the financial world by storm. Mastering Bitcoin is your guide through the seemingly complex world of bitcoin, providing the knowledge you need to participate in the internet of money. Whether you're building the next killer app, investing in a startup, or simply curious about the technology, this revised and expanded second edition provides essential detail to get you started. 

The Bitcoin Standard: The Decentralized Alternative to Central Banking

The Bitcoin Standard: The Decentralized Alternative to Central Banking
by Saifedean Ammous

When a pseudonymous programmer introduced a new electronic cash system that s fully peer-to-peer, with no trusted third party to a small online mailing list in 2008, very few paid attention.

American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road

American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road
by Nick Bilton

From New York Times -bestselling author Nick Bilton comes a true-life thriller about the rise and fall of Ross Ulbricht, aka the Dread Pirate Roberts, the founder of the online black market Silk Road. Bilton turns his investigative journalism to the story of Ross Ulbricht, the notorious and enigmatic founder of a drug empire called Silk Road... 

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