, a year ago
Energy consumption of Bitcoin mining has been the most important topic in the media the last couple of weeks. After Elon Musk announced that Tesla will refrain from accepting BTC due to its environmental impact, the whole market tanked.
Can Bitcoin and other cryptocurrencies even reduce their environmental footprint? And what needs to change?
China has a history of so-called Bitcoin bans. The truth is that Bitcoin and the industry evolving around it has never been unregulated in China. From time to time the regulation gets adjusted and usually certain business conduct that is unwanted gets prohibited.
In late May 2021 China was going against Bitcoin miners, because of the energy consumption and the emissions that Peking seeks to reduce in general. The news was one of the reasons why the prices plummeting even more within a very short amount of time.
One of the concerns is that mining will always require huge amounts of energy that need to be used. With that in mind, some people came to believe that it could be possible to change Bitcoin entirely and use proof of stake instead of proof of work.
The problem is that Bitcoins security and thus its value is highly depended on the fact that it takes a lot of resources mining it. It is not a bug. This is a feature. Most Bitcoiners reject the idea of changing BTC in this regard and it is highly unlikely that the mining industry will be in support of such a ground-breaking change. And with nobody in support of the idea it is not possible to change Bitcoin unless one would like to create another fork of it.
Changing Bitcoin in this regard is not feasible. At least at the moment and there is a good reason for it. To reduce the environmental footprint of Bitcoin and proof of work in general, miners need to opt for green energy.
Consumption is not so much of a problem if energy is green. In the end of the day it is worth to point out that everything comes with a price and an environmental impact. Bitcoin is not only hard money. It supports the idea that people around the world can freely transact. And the value of this technology is beyond its energy consumption.
Read more about the energy consumption of Bitcoin and how it helps promoting a greener grid.
Nov 03, 2022
Bitcoin is decentralized and secure. The downside of both features is that Bitcoin doesn’t scale very well and cannot execute complex smart contracts as Ethereum does. This limits its use and while the mother of cryptocurrencies still stands tall, it needs to change and adapt to the existing demand. The most promising technical approach to solve at least one of both issues is the so-called Lightning Network. It is a protocol that runs on top of Bitcoin and offers almost instant finality of transactions by facilitating them off-chain and confirming them at a later point in time. In this sense, the Lightning Network is the transactional layer that still profits from Bitcoin’s security and finality of its blockchain. TARO is a brand-new invention that was brought to life by Lightning Labs and just introduced in late September 2022 as an alpha version.
Oct 11, 2022
Stacks is a layer-1 blockchain that makes the execution of smart contracts possible. Unlike well-known smart-contract blockchains like Ethereum or Solana, Stacks builds on top of Bitcoin. Even though they're separate blockchains, Stacks and Bitcoin work together.
Sep 16, 2022
In finance, you can assess how crypto currencies are doing by comparing market capitalization between them. Bitcoin dominance is the value of all Bitcoins added together divided by the total value of all other crypto coins. Let's see why this is an important percentage.
Sep 02, 2022
Especially in a bear market, the mood of crypto investors is a bit off. Not infrequently, they fly at each other's throats. The Bitcoin maximalists, the hard core of Bitcoin defenders, go the furthest in this. But what is this Bitcoin maximalism anyway? Pete Rizzo proposed a test.