Hot topic: Why energy efficiency is holding back the information age

The world of energy efficiency has, until now, only concerned two groups of people: those who are environmentally conscious and those who want to cut costs on their energy bills.

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But a new surge in an innovative, cryptically-complex currency means that the topic of energy efficiency is suddenly back on the table – and it’s causing problems. Big ones.

The world of tech is now buzzing about ‘bitcoin’: a form of online-only currency that has to be digitally ‘mined’ to accrue it before it can be traded. The way bitcoin is created and transferred (using cryptography) means that it is quite hard to use fraudulently*. Plus there’s no middle man, such as a bank, government or other central authority that all cost users money and time.

And to say it’s taken off is an understatement. Between 2013 and 2014, there was a 57% increase in trading volume, taking its total equivalent value of volume exchanged to $23 billion.

So why are we now concerned with energy efficiency?

To “mine bitcoin”, a computer becomes an Carol Vorderman-esque number cruncher, processing and solving cryptographic problems known as ‘hashes’. Each hash solved equals a bitcoin.

Over time, these problems are becoming harder and harder to solve. Following the gold-rush moment when people originally jumped on the bitcoin train, the mining game is now a tough, expensive and time-consuming task.

Such super tasks require super-powered computers.

It’s causing a power overload

To get equipment powerful enough to make a dent in the modern virtual mining world means spending some big buck. What was once possible with a solitary computer now requires dedicated data centres, toiling day and night.

One of these industrial data centres can consume between 10 and 20 megawatts of energy a day. To put that in perspective, one megawatt is the same as a thousand kilowatts. To keep an average smart phone fully charged for a year would use just one kWh. A laptop would use about 72kWh in a year.

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And it’s become a bit of a hot topic

Bitcoin-gathering computers are consuming gigantic amounts of energy, and outputting gigantic amounts of heat.

Based on the calculations above, a single bitcoin transaction “uses roughly enough electricity to power 1.57 American households for a day.” (Source)

These powerful computers need to be constantly cooled to control overheating systems. Much in the same way that a gym needs a mighty air conditioning unit to keep its clientele cool and happy, bitcoin miners are spending even more money on cooling technology to keep their computers from powering down during a hot flush.

And so our capabilities are outstripping our technological abilities. Bitcoin provides arguably safe and speedy currency transactions, with 99% fewer carbon emissions than the banking system – but until bitcoin can reduce its energy consumption, it’s packing thousands of times more energy per transaction than a standard VISA transfer (the current largest payment processing network).

So is bitcoin worth it?

These figures might seem overwhelmingly negative, and it’s clear that we need some energy-efficient solutions to cut the power burn of bitcoin mining.

However, when taking into account a full range of external factors –environmental considerations such as carbon emissions, and social factors such as the potential for money laundering and black market profits – some say there is still a very strong argument for the sustainability of bitcoin.

Some have even suggested that the mining computers’ by-product heat can be redistributed to heat homes, as a way of repurposing the excess energy.

While the cryptic coin is still in its infancy it is certain that more solutions are needed to make this a viable option for the layman and for the long-term.

 If you’re still interested…

Here are some useful links for further exploration if you’re planning on accruing a digital fortune any time soon…

Using bitcoin safely:

A few tips for using bitcoin safely

Securing your bitcoin wallet

Bitcoin regulation:

Gov.uk call for information response: Benefits and risks of digital currencies

Will the UK government create a bitcoin hub?

 

*That’s not to say it’s not impossible – read about this careless and disastrous case that cost millions of dollars.