Bitcoin mining is being highly targeted for its growing energy use. The surge may be approaching a tipping point where, in order to prove to be a true game changer, the crypto platform will need to become “cleaner and greener”.
However, bitcoin is not receiving a lot of attention from investors – a major reason being the upcoming Ethereum merger.
Recently, Kyle McDonald told CoinDesk TV’s ‘First Mover’ that the Bitcoin network may be ‘regulated away’ because of its energy consumption.
Kyle McDonald is an independent researcher. He predicted that the bitcoin network could be “regulated,” which could lead to a huge price drop.
McDonald went ahead to suggest that people should now start selling Bitcoin. The reason is that after the Ethereum blockchain makes a shift to a significantly less energy-intensive method of validating transactions, called “proof-of-stake,” investors and regulators may realize that the energy-intensive method that Bitcoin has been using, called “proof-of-work,” was never really necessary.
McDonald’s said the “climate crisis” and bitcoin’s “widespread use of energy” are harmful. They said that, “Bitcoin does not have the same coordination as Ethereum to leave proof-of-work, it may be the first to be regulated.”
Crypto’s energy consumption has become a major concern and a bone of contention for environmental activists and governments alike. McDonald added that Bitcoin will never see $69,000 again. Bitcoin (BTC) had traded close to that mark last November.
Ethereum’s upcoming upgrade, which is essentially a software update called “The Merge,” is expected this month, with a big advantage that it won’t require as many computers to keep the blockchain running.
McDonald added that, ‘the possibility of Ethereum cutting energy costs by 99.95% is highly realistic.’
“When you’re moving from a system that’s generating random numbers as fast as possible with 10 million graphic processing units around the world, to a system running on a few thousand computers that are very low-energy, this Being going makes a huge difference.” Graphic Processing Unit (GPU) is used in cryptocurrency mining.
In order to track Ethereum’s energy movement, McDonald has created the Ethereum Emissions tracker, which takes a “bottom-up” approach. According to McDonald’s website, it doesn’t factor in Ethereum’s price or the price of electricity.
he said, “I’m starting with the hashrate, then looking at the hardware and making a technical argument about how much power should be used.”
NFT risk
McDonald points out one prominent risk, which is related to non-fungible tokens (NFTs). He said, “there’s a good chance some miners are going to switch to proof-of-work temporarily after the Merge happens.”
He added that there is a possibility that even if miners do switch, there could be duplicates of NFTs on the second chain for a short period of time. So, if it does, it could be “Potentially reduces their values as well.”
The world’s largest NFT marketplace – OpenSea, said it would support only the proof-of-stake chain and added that it has been gearing up for the transition in order to make sure the process runs smoothly.
why upgrade essential,
Shockingly, one Ethereum transaction can consume as much electricity as an average American household uses in more than a week. Bitcoin’s energy consumption is even worse!
The world’s largest cryptocurrency, Bitcoin, consumes an estimated 150 terawatt-hours of electricity annually, which is more than the entire country of Argentina with a population of 45 million. Producing that much energy emits around 65 megatons of carbon dioxide into the atmosphere annually, which is similar to the emissions of Greece, making crypto a significant contributor to global air pollution and climate change.
