What funds are spent each year on mining? According to American entrepreneur and bitcoin advocate Charlie Shrama, to assess easy: 55 terawatt-hours of energy we multiply by 7.5 cents per hour, equaling $billion of 4.125
Power raises questions and judgments about what it means for the future of bitcoin. If some believe that the money spent on mining bitcoins, you can more efficiently spend in other areas that others consider high levels of energy consumption as a reason for optimism.
“This statistic is a reason for the unbridled optimism. Every year, miners are spending on energy to $4 BILLION. Do not burn. Move. “Energy cannot be created or destroyed; energy can only move or transform from one form to another. The laws of physics”.
At the heart of this optimism are several factors. First, the money spent on mining, not just out the window. On the contrary, they effectively move into the network through Nevanlinna bitcoins.
In-the second, a large amount of costs indicate a significant number of active miners. The process of creating the blocks using the system proof of performance of work (PoW) bitcoin network confirms the increase in the number of transactions and miners.
However, Shrem’s mention of the laws of physics has caused and ridicule – he linked the money spent on the creation of the unit, including the transfer of funds from the electricity network. The counter-argument is simply that the used energy was burned. Regardless of whether continues to grow the network, energy is transformed, and not in bitcoin, but in the byproducts of combustion.
Furthermore, critics stated that such cost PoW transactions indicates the need to change the way of mining cryptocurrency. Better or more simple solution, in their opinion, can replace bitcoin as the chosen asset.
However, Shrem’s right about the fundamental principle. The price of consumption moves in the network. Of course, fossil fuels or renewable energy does not move, but the money spent doing it.
Miners are investing in bitcoin a significant amount, creating value through transaction processing. The value of the transaction that it represents, generate value in the network.
Moreover, although the argument about better or different PoW algorithm may be common, it is not convincing. New or best way of implementing transactions is possible, but it has not yet arisen to claim that bitcoin will be replaced by something else – short-sighted.
Source — CoinSpot