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Bitcoin electricity consumption drops by 43 per cent following crypto crash

The cryptocurrency market plunged by more than 50 per cent tanking hundreds of millions of dollars of crypto traders and investors. However, every event has a silver lining and the recent crypto crash also had a major impact on the energy consumption of Bitcoin.

According to Digiconomst, a platform that tracks Bitcoin’s energy consumption, the most popular crypto fell by more than a third over the past couple of weeks. Bitcoin’s annualized energy consumption dropped from about 204 terawatt-hours (TWh) per year on June 11 to roughly 132 TWh per year on June 23, a drop of 43 per cent.

It is worth noting that despite the drop, the current energy consumption is equivalent to the amount of energy a country like Argentina uses yearly.

Bitcoins are created by “mining” coins, for which high-tech computers are used for long hours to do complex calculations. The more coins there are in the market, the longer it takes to “mine” a new one and in the process, more electricity is consumed. As mining provides a solid source of revenue, people are willing to run power-hungry machines for hours to get a piece.

In 2017, the Bitcoin network consumed 30 terawatt-hours (TWh) of electricity a year. However now, according to de Vries’s estimates, the network currently uses more than twice as much energy: between 78TWh and 101TWh, or about the same as Norway. As such, each bitcoin transaction roughly requires an average of 300kg of carbon dioxide – which is equivalent to the carbon footprint produced by 750,000 credit cards swiped.

Meanwhile, in a new campaign launched, a group of climate activists wants Bitcoin to change its algorithm from Proof-of-Work to Proof-of-Stake to reduce climate consumption. The campaign called: “Change the Code, not the Climate” aims to make Bitcoin switch its algorithm, which will significantly reduce the competition to mine crypto coins. Ultimately, reducing Co2 footprint released by using expensive devices for crypto mining. The group also highlighted that cryptocurrencies don’t need much energy to work. Many newer cryptocurrencies are low consumers of energy or carbon-neutral because they use .proof-of-stake.

Recently, Ethereum also announced changing its code, and even Dogecoin Foundation is working to switch to PoS, which could reduce the energy consumption by 99 per cent. (But how will PoS change energy consumption pattern. Take a quick detour of our article on PoS Staking.)

Read More: Bitcoin electricity consumption drops by 43 per cent following crypto crash

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