How will Bitcoin solve its energy problem?

Bitcoin is ranked 40th in terms of electricity consumption in all countries worldwide. A new study has revealed the growing energy problem.

Bitcoin’s energy crisis and Ethereum Code researched

With the energy of a Bitcoin transaction, a dishwasher could work for a year. This does not mean that Bitcoin transactions would require large amounts of energy, but only that many miners are in circulation. Currently, miners earn about $100 per transaction. Digiconomist estimates Bitcoin Miner’s power consumption in its Bitcoin Energy Consumption Index (BEXI). According to its data, Bitcoin Ethereum Code consumes 67.91 TWh annually, which is slightly more than Chile, which ranks 40th in the world at 66 TWh. They estimate the electricity consumption per transaction at 929 kWh. The biggest problem, however, is that there is no recovery in sight for the time being and energy consumption is rising steadily.

The index must calculate back the energy consumed using values from the past. It starts with how much money the miners earn and how much they are estimated to spend on electricity. Then one looks at the electricity price and estimates how much electricity is consumed. The index model is of course based on many assumptions and planning data, but it is almost impossible to determine the exact consumption.

Will the Bitcoin Lightning Network help?

The Lightning Network takes Bitcoin transactions out of the block chain by establishing channels between users. Transactions between them take place and are only recorded in the block chain when the channel is closed. This reduces the number of transactions that the nodes have to confirm, and thus the power required to maintain the network.

However, most of the power is used for Bitcoin mining. It is unlikely that the number of transactions in the block chain will affect the number of miners. Bitcoin transactions have halved since December, but the difficulty of mining has doubled, suggesting that at least twice as much hash power is used.

The International Energy Agency published that renewable energies will grow by 40 percent by 2022, stressing that renewable energies dominate the creation of new energy sources. Iceland has already shown how it can work with renewable energy. Essentially, renewable electricity enables the operation of the Bitcoin network without changing the underlying structure (PoW – Proof of Work).

Other ways to solve the problem are, for example, switching to proof-of-stake. Digiconomist estimates that Ethereum consumes about a third of the electricity. However, there are also some criticisms (centralisation…) of the proof-of-stake, so this is unlikely to be an option. As long as Bitcoins can be mined (year 2140) and the price is at an attractive level, renewable energy seems to be the only option for the first time.

Russian airline issues flight tickets via Blockchain

We believe that content monetisation and eCommerce will be one of the major drivers behind the global demand for micropayments, especially in developing countries. Billon aims to offer its eCommerce and content monetisation merchant services in Poland this autumn and then in the UK by 2018.”

With this project, Billon would for the first time offer a cloud and mobile peer-to-peer solution for so-called Fiat currencies based on DLT. The first trials in the area of content monetisation were successfully completed in 2016. With the support of the European Union, Billon did not, however, make use of public funding programs for the first time. In November 2016, the start-up company had already participated in the sandbox programme launched by the British Financial Conduct Authority.

Russian airline issues flight tickets via Blockchain

Since July 2017, the airline S7, one of Russia’s largest airlines, has been handling ticket sales via the Ethereum block chain. The airline was supported in its implementation by Alfa-Bank, as the news magazine Kommersant reported. However, it was not clear whether it was a public or a private database. Airline S7, which is the country’s second-largest airline with around 9.5 million passengers, wants to use this technology to reduce the transaction time between intermediaries and the airline, which has so far been around two weeks. Payment transactions are also to be processed faster and more effectively because commissions received by intermediaries can be automatically deducted from the invoice amount.

The blockchain in the automotive industry: Renault plans to save the repair data in a database
Blockchain Renault
As was announced in the summer of 2017, the French car manufacturer Renault is working on a block-based and digital maintenance book for vehicle repairs. The manufacturer is developing a prototype in close collaboration with Microsoft, the Microsoft cloud platform Azure and VISEO, a blockchain company. Renault’s main objective is that the database should contain all the maintenance information from dealers and garages in the database. This would allow all the information, including a time stamp, to be clearly displayed on a single platform. According to the Renault managers, this option is of interest not only to dealers and repairers, but also to insurance companies.

Ethereum founder informs about the progress of Bitcoin Code

Last week the Community Ethereum Development Conference took place, and Ethereum co-founder Vitalik Buterin reported on Casper’s progress and the Proof of Stake (PoS) consensus protocol to drive the future of Ethereum.

Ethereum is the most popular platform for the introduction of new tokens by ICOs and has taken a leading role in the expansion and maturation of the crypto industry. Etherscan has more than 81,000 ERC-20 token contracts, many of which are associated with Ethereum. ICOs based on the Ethereum Blockchain have already collected nearly seven billion dollars this year.

Proof of work is too much work
Like Bitcoin, Ethereum’s blockchain is based on a Proof of Work (PoW) consensus protocol that has proven incredibly effective at securing the network and maintaining the distributed ledger. Proof of Work is best known for its energy-intensive mining.

Bitcoin CodeĀ is too much work

This is also the criticism of mining, as the PoW consumes too much electricity, Bitcoin Code is onlinebetrug not environmentally friendly, and could theoretically endanger decentralization. Buterin and other blockchain developers have long expressed concerns about PoW’s energy consumption and its limitations as a scalable protocol. For example, a single unit with sufficient computer power could disproportionately control the blockchain.

Casper – High Staking Entry Barrier
In January, Ethereum introduced Casper’s Testnet, and crypto investors responded by seeing the price of ether exceed $1,000 for the first time. Last month, more details became known about the algorithm, formally known as Casper FFG, which will drive the network’s transition to a PoS (Proof of Stake) model.

However, the entrance fee is quite high – according to Buterin, users need 1,500 ETH to participate in Casper Staking, which is over $1.1 million. The net requires such a high admission price, as it can only accommodate a relatively small number of nodes. However, it is rumored that Casper can guarantee a higher number of nodes after Sharding has been implemented.

The user’s initial ether amount is stored in an intelligent contract, and the PoS rewards are paid out accordingly. The higher the initial amount, the more the user will be paid for his effort. Based on an initial investment of 10 million ether, Buterin estimates that a node that is continuously online could generate a return of up to five percent. According to Buterin, users would only need to be online a third of the time to achieve a positive return.

Interestingly, nodes are rewarded with a PoS concept for connectivity, but also punished for their inactivity. In addition, the Casper protocol penalizes users for things such as staking pools. As the development of the network progresses, the entry barrier of 1,500 ethers is likely to decrease.