Bitcoin’s price is very unexpected. In the last seven days it was 20% above the low of the week. There is no anomaly in the dramatic short-term swings
Bitcoin’s price is very unexpected. In the last seven days it was 20% above the low of the week. There is no anomaly in the dramatic short-term swings, which make Bitcoin’s jump to 20% is similar to 1% in financial markets in Neo-Zealand and the US, much more unpredictable than share equity.
Regardless of the uncertainty, some financial institutions and businesses such as JP Morgan, Microsoft, Morgan Stanley and Tesla take Bitcoin seriously, causing investors to consider the currency and potential investments of Bitcoin. But we should also consider whether Bitcoin mining’s energy demand is good for the future of our world.
If Bitcoin were a nation, it would be one of the thirty biggest electricity-graded countries. Norway, which is significantly bigger than New zealand, will rate just ahead of it.
Since new Bitcoins mining requires huge quantities of energy. Google is a big corporation of 100,000 people and space-hungry data centers across the globe, but Bitcoin mining absorbs 10 times more power.
Unlike traditional mining, Bitcoin is ‘mined’ as computers crack complicated equations and new Bitcoin is launched as a reward. Mining new coins has become more and more difficult and needs more and more resources and energy from the computer.
Burning coal to produce power for Bitcoin mining in a climate change-driven world is questionable, if not insane. According to a study carried out by the University of Cambridge, just over 60% of Bitcoin’s power comes from non-renewable sources.
Some of the biggest investment and innovation minds believe that the enormous power requirements of Bitcoin could be optimistic.
A recent paper backed by Elon Musk of Tesla and Cathie Wood of ARK states that bitcoin mining is an ideal addition to solar and wind power projects, especially if battery storage technology supported it.
The argument is that Bitcoin will step up when major renewable power plants in Europe, Asia and the USA are suppressed with power over-supply concerns. It is believed that Bitcoin should be clustered near new renewable energy projects in order to solve problems related to power supply and to promote more green energy. It’s an extension.
Drawing a comparison between Bitcoin mining and potential green energy development is an exemplary way to defend Bitcoin’s huge use of non-renewable energy.
In the end, the worth of bitcoin is an investment or currency as it puts its energy needs aside. Back in January we speculated that the Bitcoin price could easily double – or halve – the prices were 38.000 US dollares (NZ$ 53.000). Bitcoin almost got this done – it increased nearly 70 per cent over the past two weeks from beginning January to mid-April.
Powerful market movements for Bitcoin investors, both up and down, were very good for long-term retailers overall. But the huge non-renewable energy impact of Bitcoin mining means that it doesn’t sound like this massively successful story for our world.
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