Electric energy moves the world and many times is the world moves for money, even if it is fiat. Electricity is a global issue, of national security for most countries. So it is for Bitcoin (BTC), but without being a State.
Maintaining the security of the network is worth more than the speed that have the transactions. Shielding a distributed system for the transfer of value requires its participants to use energy to protect and validate information . This has been questioned in the past by people who are unaware that most of the energy used by Bitcoin is renewable, according to some studies.
For Reflecting on the energy and current issues bitcoiner, CriptoNoticias spoke with Julián Drangosch, electrical engineer, Argentine teacher and participant of the NGO Bitcoin Argentina. For the researcher, energy consumption is currently misunderstood in society, which has led to indications of the first cryptocurrency.
Why is energy use so important in the Bitcoin network?
The energy consumption of Bitcoin is the most important of the network, because it is one of the parameters to measure how resistant to censorship is BTC . Energy is a commodity in our universe and spending to ensure that the protocol rules are met ensures that, if you want to attack the Bitcoin network, you will have to spend that same amount of energy to try and perhaps succeed.
This premise is aligned with the concept of Zahavian signs that was proposed by Amotz Zahavi. He explained how evolution leads to “honest” or reliable signaling between animals that have an obvious motivation to cheat or deceive each other. It establishes that expensive signals must be reliable signals, since what it costs the signal issuer to emit it could not be offered by an individual with less capacity.
In this way, the Bitcoin network is protected, spending energy that other entities, whether companies, nations or countries, cannot carry out.
Why do you think Bitcoin is accused of energy “waste” when other industries such as traditional mining or banking perform worse?
I think energy consumption is misunderstood, partly because the energy industry is not something known to many people and partly because of the media that make notes with titles with clickbait (bait) to attract readers To your notes.
All human activities consume energy and I do not see that we are judging with the same severity what these industries contribute to human public life. I think it is related to whether one thinks that the Bitcoin Network adds value to the world by having an incorruptible monetary network or not.
If one believes that it is a positive contribution then energy expenditure is valid and If one does not consider it that way then ANY energy expenditure should not be done. That is a highly censorious position. If one compares the Bitcoin network in annualized energy consumption with other human activities such as:
- The world’s clothes dryers consume 1.6 times that of BTC.
I do not see that we are wanting to stop these industries, copper is a fundamental part of the electrical energy transport industry, aluminum is for the aviation industry and Bitcoin is essential to have a new monetary system out of the hand of our rulers and bankers.
The so-called Bitcoin Mining Council noted that 56% of miners use sustainable energy, what to do to increase that number?
Mining has evolved throughout the history of Bitcoin since mining with the CPU, GPU, FPGA and ASIC. It has also done so with regard to its energy consumption: initially, it was mined with the energy available in the jurisdictions where they were installed, and that has also evolved.
Naturally, mining is going to emigrate to where they can have access to the cheapest and most efficient renewable energies (which would be hydroelectric) and to the jurisdictions where they can have laws and predictability in the legal status of Bitcoin mining.
Canada with 400 TWh of hydroelectric power available and the United States with 285 TWh seem to be ideal.
Power companies are already talking about providing nuclear power to bitcoin miners. How do you read these ads?
Any type of energy that can be created on demand is the right thing to do. Nuclear power is infamous for the FEW nuclear accidents that have happened throughout history. But instead we have installed tens of hundreds of coal and gas generators that have emitted tons of CO2 into the atmosphere.
What do you think could be Argentina’s potential for Bitcoin mining? How is expansion going in Patagonia?
Analyzing it honestly Argentina has little potential in my opinion. Not because it does not have energy resources, but rather that Argentina’s energy matrix has been expanding based on gas and coal in the last 2 decades, promoting the importation of fuels from abroad, creating a fiscal deficit.
More Beyond that, on October 26, 2020, the Bitfarms company announced a non-binding memorandum of understanding to secure electricity at approximately US $ 0.02 per kWh with the plan to pursue the development of a 210 MW Bitcoin mining facility in Argentina. .
Do you think that the energy potential of Paraguay will convert it in the future in the “new China” for miners?
Unlikely to be the new China. Mining was located in China for 3 particular reasons, which occurred at a particular time and will not be repeated. The reasons were: access to ASIC equipment, since the manufacturers are predominantly in South Korea and Taiwan; low cost of transportation and hydroelectric energy in large quantities available for consumption.
If one looks at the energy matrix of Paraguay, most of the energy is hydroelectric, but they do not have enough generation for the demand of Bitcoin energy.
According to the energy consumption index created by the University of Cambridge, the annualized c onsumo of Bitcoin today is at 93.5 TWh , but over the last year it has been at 170 TWh, that means that Paraguay could absorb a certain part of the hashing power of Bitcoin, but not 50% as at one time it was hosted in China.
In El Salvador they talk about geothermal energy as an alternative for miners, do you think that its 204 MW capacity will be able to supply an industry of this type in the country?
If one performs the calculations, 204 MW of Energy can power around 62,500 state-of-the-art equipment (Bitmain Antminer S19 Pro, which individually consumes 3.25 kW each). These computers would generate 6,875 Exa Hashes for the Bitcoin network, which corresponds to 5.2% of the computing power that the network has now, but which represents 3.8% of the maximum that was seen at the beginning of the year.
Let us remember that the Proof of Work is a competition and the computing power of the network is reconnecting and protecting the network very quickly, in the last 2 months we saw that the difficulty of the network increased 54%.
With the exodus of Chinese miners ¿ How do you think the map of hash rate will look on a global scale? Which countries would benefit?
Yes While some inexperienced investors may have been spooked by China’s Bitcoin mining ban, this narrative has been around since 2013-2014. Indeed this time many facilities closed in the provinces of Sichuan and Xinjiang and are moving to other locations.
Each Once you attack an anti-fragile system, the system becomes more resilient to those attacks. Bitcoin mining is leaving China, and in response all Bitcoin mining is going to flourish in different countries. It is a trend that has existed for at least 3 years. Russia, the United States, Kazakhstan and Iran are the most likely destinations for these facilities.
Not only the computing power of the Bitcoin network will recover its value of 180 Exa hashes / s , had its minimum value at almost 80 and is currently at 130 exa hashes / s, but with the price increase of almost 500% that it had in the last year we could see a new infrastructure installation and continue to increase network security.
Do you consider Proof of Stake projects ( PoS) could they gain any advantage over the Proof of Work (PoW) for the Bitcoin mining questions?
Bitcoin is not a mechanism for the transfer of bitcoin, rather the creation or transfers or the currency is a side effect of the network. The Bitcoin blockchain (or as Satoshi called it, “timechain”) is a mechanism for the transfer of synchronization packets of this Proof of Work protocol.
That shows that there is no Need for blockchains with other synchronization mechanisms such as Proof of Stake (PoS). It is not that the blockchain is the important thing and then we have to make the PoW more efficient and that is why we change the synchronization mechanism to PoS. The real invention is the Proof of Work (from Adam Back in hashcash ) and that’s what we need in the world and the blockchain is the way to transmit it to the world.
With other technologies such as Client Side Validation, already having a global consensus on the state of the network and a mechanism for the transfer, you can have data off the network, but committed to a state that is on the network. The participants of the commitments (smart contracts or DLC) do know the commitments and statuses, but no one else on the network knows it.
Whoever did not understand this fundamental concept, still did not understand Bitcoin Any other consensus mechanism such as PoS is proven to be attacked. We will see these scenarios when Ethereum changes its consensus mechanism on a large scale.
