If You Are Going To Worry About Bitcoin's Energy Consumption, Worry About Server Farms Too -- For More Than One Reason
from the terawatts-up? dept
Bitcoin has been much in the public eye recently. Most of the attention has been focused on the extraordinary rise in its price as measured against traditional currencies. But another aspect that has been exercising people is its energy usage, as a post on the Digiconimist site explains:
The continuous block mining cycle incentivizes people all over the world to mine Bitcoin. As mining can provide a solid stream of revenue, people are very willing to run power-hungry machines to get a piece of it. Over the years this has caused the total energy consumption of the Bitcoin network to grow to epic proportions, as the price of the currency reached new highs. The entire Bitcoin network now consumes more energy than a number of countries, based on a report published by the International Energy Agency.
Currently, the country closest to Bitcoin in terms of electricity consumption, expected to be around 32 terawatt-hours this year, is Denmark. Some are predicting that by 2020, the Bitcoin system will use as much electricity as the entire world does today. Others aren't so sure. Here's Ars Technica:
When Bitcoin launched in 2009, each block came with a 50-bitcoin reward for the miner who created it. This figure is scheduled to fall by half every four years. It fell to 25 bitcoins in 2012 and 12.5 bitcoins in 2016. The reward will fall again to 6.25 bitcoins in 2020. When the mining industry's revenue falls by half, its energy consumption should fall by the same proportion, since, if it didn't fall, mining would become an unprofitable activity.
In any case, a new article in the Guardian reminds us that Bitcoin is just one part of a much larger energy consumption problem that the digital world needs to address:
The communications industry could use 20% of all the world's electricity by 2025, hampering attempts to meet climate change targets and straining grids as demand by power-hungry server farms storing digital data from billions of smartphones, tablets and internet-connected devices grows exponentially.
It doesn't really matter which of Bitcoin and the server farms will consume the most power in years to come -- clearly both will be large, and both will require efforts to increase the availability of low-cost renewable energy so as to minimize their environmental damage. But there's a fundamental way in which the two sectors differ.
Bitcoin is burning up the tera-watts to carry out meaningless calculations in order to win the prize of the next cryptocurrency block. Server farms need power in order to store detailed records of everything we do online, or with our connected devices, alongside masses of Internet of Things data streams. Whatever it is doing, Bitcoin is certainly not threatening our privacy, and arguably is enhancing it. But loss of privacy is exactly the risk arising from the use of massive server farms around the world.
The main reason why they are being built is to hold unprecedented quantities of personal data that can be analyzed and the results sold in some way -- whether for advertising, or for other purposes. We constantly see stories about sensitive information being leaked on a massive scale, or legally acquired and then used in troubling ways. Alongside worthy concerns about the way that Bitcoin mining can degrade our physical world, we should worry more about how data mining can degrade our more personal space.
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Filed Under: bitcoin, energy consumption, servers
