Being an electronic currency, Bitcoin and other crypto consume some energy. But, is it enough to be a problem? Some recent press and studies make it sound like it.
Here, we’ll talk about why Bitcoin uses energy and how much energy it uses. That way, you can make up your own mind.
Why Does Bitcoin Use Energy?
So first off, why does Bitcoin use energy?
For most people who use it, it doesn’t. Buying and selling Bitcoin or using it to make purchases doesn’t use more energy than using a credit card.
However, Bitcoin mining can use quite a bit of energy.
Bitcoin mining is the process of producing Bitcoin by confirming the complex mathematical operations that make up the blockchain.
This doesn’t take a supercomputer but it requires more than any old laptop. A custom computer for mining, called a “rig”, does use quite a bit of energy. Further, some hardcore miners run multiple rigs at once.
This can use so much energy that mining on a large scale can end up costing money in places with high energy costs. In Iran, the government recently seized mining rigs that it was able to locate by their high energy usage.
How Much Energy Does It Use?
Now that we’ve established why Bitcoin uses energy, how much does it use?
That’s a difficult question. For one thing, Bitcoin is decentralised so there’s no way of knowing how many mining rigs there actually are out there. Further, we don’t know how they’re all powered and where power comes from is more important than where it’s going. Mining rigs powered by hydroelectric, wind, or solar are better for the environment than those plugged into a coal-fired grid. Without a
That doesn’t mean that people haven’t guessed. One recent figure says that Bitcoin uses as much energy as the country of Ireland. Remember that statistic, we’ll get back to it.
Another damning study found that Bitcoin emissions alone could push global warming above 2 degrees celsius.
All of that sounds pretty bad. However, that’s just one way to look at those numbers.
How Much Does It Really Take?
Bitcoin uses as much energy as Ireland? you ask. Egads! Ireland is a whole country! But, let’s examine that claim.
Remember how we pointed out earlier that virtually all of Bitcoin’s energy footprint comes from mining? And that you don’t need to be a miner to use Bitcoin?
We know how many Bitcoin wallets there are on the blockchain. People can have more than one, so that’s not an exact number. However, market estimates say that there are just over 7M active Bitcoin users. Meanwhile, there are just under 5M people in Ireland. That means that if Ireland and Bitcoin use the same amount of energy, cryptocurrency is more energy-efficient in per-capita terms.
Further, studies point out that the top four cryptocurrencies generate between 3 and 15 million tonnes of carbon dioxide. The study mentions that that is more than the carbon footprint of gold. However, it also mentions that crypto mining consumes less energy that mining aluminium.
Furthermore, Dr. Katrina Kelly-Pitou, a researcher who studies clean energy technology, specifically the transition toward decarbonised energy systems, says that banking actually consumes more energy than Bitcoin. Banking consumes an estimated 100 terawatts of power annually. If bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2 percent of all energy consumption.
The Next in an Unending Line of Bunk
Older readers may think that all of this talk sounds familiar.
In the early nineties, predictions about the internet’s energy use were prevalent. None of them were good.
However, more in-depth studies later found that those predictions were much higher than reality. As software was developed and hardware became more efficient, the energy use of the internet dropped further. There’s no reason to imagine that the story will be different for crypto.
Hopefully, these numbers have helped you understand where the carbon footprint comes from and why it’s there.
One thing that we didn’t address, however, is the fact that crypto isn’t some superfluous luxury. Cryptocurrencies have allowed millions of people to protect their wealth from inflation, fight censorship, store wealth without access to banks, and much more.
Why some people choose to attack cryptocurrencies is unclear. To quote
Dr. Kelly-Pitou again, perhaps people should quit criticizing bitcoin for its energy intensity and start criticizing states and nations for still providing new industries with dirty power supplies instead.
BITCOIN VOLATILITY DWINDLING, HAS BTC TAKEN AN EARLY VACATION?
Bitcoin and cryptocurrency markets are slowing down. There has been very little activity over the past week as volumes and volatility decline. Technical indicators are also lining up which could indicate a larger move is imminent or is BTC on vacation for the rest of the year?
BITCOIN SLOWING DOWN
This may not be such a bad thing. One of the points bitcoin detractors always make is that it is too volatile to be used as a daily currency. This much is true if a cup of coffee is going to be 20% cheaper ten minutes later you’re not going to buy one in BTC right now.
Over the past year or so these massive price swings have decreased in amplitude and it appears that bitcoin has entered a low volatility regime.
Day traders seeking quick bucks have had to take a break as movements are minimal at the
This type of action often preludes a bigger move and technical indicators such as Bollinger bands squeezing are also indicative of such.
This slowing of momentum has happened across the board, not just on bitcoin markets. Ethereum volatility is also at low ebb, falling to levels not experienced since 2016 as noted by Coin Metrics.
It could just be that time of year when traders take a break and FOMO is as thin as the first fall of winter snow. If this is the case then markets will remain flaccid until sometime next month.
Bitcoin News Today – Headlines for December 14
- Investor believes round numbers are very important in BTC markets
- BTC crossing $10k is important says investors and analysts
- Crossing the $10k mark in the near-term will ensure that Bitcoin’s price action is positive.
Bitcoin News Today – Bitcoin investors have always gravitated towards round figures. According to one top crypto investor and commentator, the importance of round numbers can’t be overstated especially in a nascent market. This implies that after reclaiming the $10,000 mark, the macro price scales will ensure that Bitcoin can go higher and higher until it reaches a new round number.
The Importance of Round Number Prices in Crypto
During a recent interview with Luke Martin, Three Arrows Capital Su Zhu said gave his opinion on why round numbers are essential. According to Zhu round numbers are important in the crypto market because the leading crypto topping the $10,000 mark will be an important time in terms of forcing a good price action. It isn’t only Zhu who is of the view that $10,000 is of great importance for Bitcoin and the entire crypto space.
Earlier in the year, Tom Lee, Fundstrat Global Advisors’ resident crypto analyst released his analysis for BTC by his firm. His analysis implies that if the price of BTC reaches and crosses the $10,000 level it could mean
Another platform that agrees with Zhu’s view is Bloomberg. Bloomberg wrote in November of this year about the importance of the $10k barrier and how essential round figures with four and five digits are. The platform said Bitcoin faces a solid resistance point at the $10,000 area. The coin will have to break this barrier if there is to be a confirmation and continuation of meaningful gains.
Is the $10k Mark Attainable for Bitcoin?
Speaking about Bloomberg and BTC getting to the $10,000 mark, one analyst at Bloomberg believes that it’s just a matter of time before the number one crypto tops that key position. The analyst, Mike McGlone, who is the senior commodities strategist at Bloomberg, revealed in his monthly market update that he believes that Bitcoin will top the essential $10,000 resistance point. He said as gold rallies, Bitcoin should rally. While Gold is currently trending below BTC amidst the trade war, the macro picture may begin to favor gold and Bitcoin as we head into 2020.
Stratis Will Increase Rapidly If It Moves Above 4500 Satoshis, Predicts Trader
Stratis has been trading in a range since August 2019. This movement has the characteristics of the consolidation phase, after which a new bullish market cycle is expected to begin.
The trading range of this consolidation has a magnitude of 40%, and the price has tested both the resistance and support areas several times. At the time of writing, it was moving upward towards the resistance area.
Additionally, he suggested that a breakout above the 4500 satoshi resistance area would probably accelerate the rate of increase.
Let’s take a closer look at the price and see how likely this is to happen.
First, the Stratis price reached the long-term support area at 3000 satoshis in August 2019.
This was almost an all-time low, coinciding with the lows reached in 2016, which was the bottom before the 2017 upward move.
Additionally, the RSI reached an all-time low value of 23 during this time and created bullish
This suggests that this is a very suitable level to make a low and initiate a reversal, as we have suggested in our previous article.
Looking closer at the movement, we can see the trading range, consisting of two support and one resistance area.
The main support area is at 3250 satoshis, where the double bottom was created. This is followed by the minor support area at 3850 satoshis. The minor support coincides with the 100-day moving average (MA). The price has flipped it as support. The price fell inside it twice and began an upward move each time.
The resistance area is found at 4500 satoshis and the price has not reached it since November 30.
On December 11, the Stratis price broke out above the descending resistance line that had been in place since the beginning of December.
The breakout transpired with significant volume, increasing the validity of the movement. Afterward, the price returned to validate the descending resistance line, a common movement after breakouts.
To conclude, the Stratis price is likely consolidating before beginning a new market cycle. A decisive breakout above 4500 satoshis is expected, confirming that the new cycle has begun.