Solving the unknown
Solving Unknown'
Does the Bitcoin have any value? would anyone pay even US $ 1 for a Bitcoin? What problem Blockchain solve? Is it right to handover the private information in the hand of several miners as Distributed ledger? Are we not spending much more on crypto coin then they are worth even their today's market value? Let us find out.
Blockchain is fashionably spreading. It is hyped like a nectar for enormous wealth. Passion and emotions runs high among miners and traders.
Blockchain is simply Distributed Ledger Technology for keeping records. It runs through distributed nodes who are mostly called miners or holder of coins. While running the blockchain coins like Bitcoin, Etherium etc. are generated and distributed among the miners or holders of the coin. This distribution ratio is decided on the basis of mining power a miner is using or number of coins being held by a person (Proof of stake).
Anyone can start his own blockchain having as many coin supply as the creator wishes, with the help of a laptop ans by hiring a server for few dollars. He only need to create a wallet(s) for the coins to be generated through his blockchain.
Blockchain is supposed to keep running by the miners or stake holders. This Blockchain, technically while it is running is supposed to solve equations/problems and in doing so certain amount of coins are generated (as per the programmed by the creator of blockchain) which are distributed among miners or stake holders.
Generally , coins are mined using computing power. more the power one uses more coins he gets. King of crypto coin is Bitcoin which is mined by maximum numbers of miners around the world by using maximum power using high efficiency ASIC miners, array of Graphic processor. These all consume electricity.
After introduction there are certain question which arise and need to be answered. Here is other side of the coin. For reference I am taking Bitcoin as example.
A. As per an article appeared in https://www.engadget.com/it-takes-an-estimated-seven-nuclear-plants-to-power-our-bitcoin-mining-212441059.html?guccounter=1 it takes seven (7) nuclear power plant to power the mining of Bitcoin. Also as per https://www.exodus.io/blog/how-many-bitcoins-are-left/#head4 only 900 Bitcoins are mined everyday. Considering price of Bitcoin @USD 10,000 then total value generated for miners per day is about 9 Million USD (3.285 Billion USD per year). Let us not calculate how much power is consumed in mining Bitcoins worth 3.285 Billion USD per year.
As per website https://digiconomist.net/bitcoin-energy-consumption/ bit coin mining is at present consuming 68.13 TWh of power (Comparable to the power consumption of Czech Republic) with 32.36 Mt of carbon Footprint (Comparable to the carbon footprint of Azerbaijan) and producing 11.08 Kt of electronic waste { Comparable to the e-waste generation of Luxembourg) .
For the sake of convenience 68.13 TWh is equal to 68130000 Megawatts. Cost of 1 MWh is, as per wikipedia page https://en.wikipedia.org/wiki/Cost_of_electricity_by_source , about 118- 192 USD per MWh. If one take mean of USD 150 as cost of 1 MWh of power than total cost of 68130000 MWh per year would be X150 USD = 10.2019 Billion USD per year. The world is spending 10.2019 for mining Bitcoins worth only 3.285 Billion USD. This expenditure is only for power not to mention the money spent on equipment, manpower and other incidental items.
We are all happy in spending three times then income achieved by miners. Wise??? Who knows the price of Bitcoin may shot upto 50 K tomorrow ? or may be to 100 USD ? who knows?
I have more reasons to establish and open the other side of perception on Crypto Currencies which I would delve on in my next post.