The Bitcoin has faced serious allegations against him throughout his life. While Bitcoin was initially dubbed "Internet Money" and was seen as primarily helping the likes of drug traffickers and criminals, it managed to get rid of these labels and demonstrated use cases positive for users and investors. Recently, the Bitcoin consensus mechanism has been scrutinized, as many believe that the requirement for mining pools is putting increased pressure on the environment. Even for miners, however, energy consumption has become crucial and is the key to their profitability and survival.
In a recent episode of the On the Brink podcast, Apolline Blandin, researcher on cryptocurrencies at the Cambridge Center for Alternative Finance, spoke about the profitability of miners and the energy consumption of the Bitcoin network and their impact negative for the environment. Blandin noted that the view regarding Bitcoin mining pools and their energy consumption still elicits polarizing opinions in which individuals claim they are extremely harmful or exactly the opposite. Elaborating on the Bitcoin electricity consumption index , Blandin noted,
"The underlying idea of ??this index is that miners will only operate equipment as long as they are profitable. And so the first step was to identify all the mining equipment available on the market, then calculate the profitability. "
In terms of profitability, for many mining operations located in different geographic regions that have different energy costs, minor details add up to have a significant impact, especially after the reward for the third block has been halved. S9 miners are nearing the end of their life cycle and, interestingly, the breakeven costs for most mining operations are determined by the cost of electricity. A mining miner S9 at 0.030 kWh should have the same balance cost as a mining miner with the last miner S17 at 0.07 kWh.
Source: Blockchain.com
Network data show that last month, after halving the block awards, miners' incomes have taken a serious blow. This has also led to speculation about the competitive advantage of the old mining platforms located in China over miners located elsewhere.
Responding to the question of whether bitcoin mining is a waste, Blandin had an interesting parallel to highlight, she argued,
“If Bitcoin is a waste, then you look at the amount of electricity consumed by still active but inactive home devices in the United States, then you realize that these could power the Bitcoin world for about 4. 6 years . ”
