Perhaps the fact that Bitcoin is in a price bubble (if at all), it doesn't matter. The death of digital currency can bring tremendous increase in the cost of electricity for mining.
While Bitcoin flirts with price level $8 000 in 2022, based on current growth trends, energy consumption, cost, necessary for mining at least pay off would amount to the incredible figure of $300 000 to $1.5 million, according to Christopher Chapman, an analyst from Citigroup Inc. At that rate, the estimated consumption in the long term would correspond to a consumption all over Japan.
"We believe that such levels of mining will not be achieved, and that the government will regulate and tax the miners to reduce electricity consumption," said Chapman in an email Thursday.
Source: Bloomberg
Mining, along with peer-to-peer network, known as a blockchain forms the core of the virtual currency, by performing tranzactii and maintaining an online registry of tokens in the system. Miners, in turn, are rewarded for participating in the so-called system proof of performance of work (Proof-of-Work).
In recent years, they battled for the receipt of virtual currency as the number of bitcoins awarded is decreasing, with increasing costs and rapid competition that is exacerbated by the growing influence of virtual currencies on wall street. The speed of creation of new bitcoins is limited, and all of them will be issued no more than 21 million
These difficulties contributed to calls for the introduction of the evidence of share of ownership (Proof-of-Stake), which will allow users to create and confirm the transaction in proportion to their possession of the digital currency. Proponents argue that this will negate current system rewards miners with the highest computational power.
There is no direct way to measure the amount consumed in the process of electricity. However, the analyst believes that the exponential growth of the mining calculations carried out in the network – a boon for suppliers of semiconductors and power supplies indicates that the mining community is aiming for a mind-boggling and back-breaking height of Bitcoin prices.
As the current arms race is not consistent with the interests of the established miners, we believe that the BTC network could shift to evidence ownership interests, especially if these changes will carry out the main competitor, Ethereum, noted Chapman on 7 November. Such a move is not certain, but it may be necessary for the survival of the currency.
However, the model Proof-of-Stake itself is hardly perfect.
What will happen if the change model mining is not, and the price to 2022 will grow to predpolagaemyh $300 000 — $1.5 million? Please share your opinion in the comments.