Why Bitcoin is said to be resource-intensive (Bitcoin is wasteful of resources)
Why is Bitcoin considered to be resource-intensive? Bitcoin is a complex financi
Why is Bitcoin considered to be resource-intensive? Bitcoin is a complex financial system that consumes a tremendous amount of resources.
In the world of cryptocurrency, the term “transaction” is used as a medium of exchange, store of value, and settlement tool, and this is exactly where the power consumption of miners comes into play: when you want to send a digital asset, a large amount of electricity is required. To confirm a transaction after a block, a certain fee must be paid or other network devices must be used. But if Bitcoin mining involves high-risk issues, such as transactions with excessively high fees that are not suitable for small transfers, delays in transactions due to lack of transaction records and inability to complete cross-platform transactions, why does Bitcoin still require fees? Let’s take a look at how much resources Bitcoin actually consumes.
1. Transaction costs
Due to the presence of many unpredictable information in the Bitcoin blockchain, this information affects people’s behavior and disrupts the entire ecosystem. So how do you calculate the price of your Bitcoin and what it can buy? We can understand this through the following data:
1. What addresses can you find?
2. How much BTC do you own (about 1 billion coins)?
3. Do you have enough ETH to participate in staking?
4. Are 100,000 Bitcoins enough to ensure that your coins will not be lost?
5. Has Bitcoin already started a “carbon offset” mechanism?
If you are investing in Bitcoin and believe that you can get more returns than ever before, you should get involved! Because Bitcoin itself is an energy-intensive network protocol, so 1% or more of its total supply comes from newly mined bitcoins. Therefore, in the long run, Bitcoin’s usage will continue to increase over time.
2. Mining pool
For anyone, mining can be seen as a revolution, but for the majority of ordinary users, they don’t have many choices or the motivation to develop their own applications, software, or solutions. However, if someone wants to join the Bitcoin community, they may waste a large amount of capital and manpower, making their lives more difficult.
Currently, there are many different incentive mechanisms on the market that determine the price trend of Bitcoin. For example, the average daily active wallet volume of Bitcoin is directly related to the time required to generate a new block per hour. And this situation can also lead to huge energy consumption: assuming everyone has an account and holds more than $1,000 worth of Bitcoin, the income of all these users will decrease by more than half.
3. Exchange/miners
As a new type of virtual economy, we often refer to Bitcoin as a “get-rich-quick scheme”. It not only consumes a considerable amount of computing resources but also includes a large amount of hardware and software. Although technologies like the Lightning Network can effectively achieve this goal, most exchanges are now looking for alternative solutions.
Bitcoin is wasteful of resources
For the future development of Bitcoin, in addition to price increases, decentralization is the most important. It not only has no value but also poses a threat to network security. In the foreseeable environment, blockchain technology will be the trend of the future.
Bitcoin has become a huge market as a form of encrypted asset, providing people with a method of exchanging and trading digital currencies. It can even eliminate intermediaries, reduce trust costs, and achieve the goal of financial freedom. However, its unlimited development makes its volatility too high. It cannot meet the growing demand and makes it difficult to sustain because it only makes them meaningless or flawed. Therefore, if Bitcoin can really solve this problem and remain unchanged, it is like wasting resources! It is a good choice! It exists not as a currency but for the pursuit of short-term profit. When we talk about Bitcoin, the first thing to understand is what “investment” is and why you need to invest.
If you want to speculate, you can buy anything from your investment portfolio at a fixed price – such as gold or oil, and so on. Then you will get a very cheap stock, not “cash” as many people say. This is why they think this way: “I know it’s a speculative mindset.”
Actually, “investment” itself is not an investment. “Investors usually want to own something, but they don’t always want to put money into it,” Bitcoin founder Peter Schiff said, “everyone’s effort is consistent with their knowledge.” (Bitcoinist)
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