Bitcoin was born ten years ago while the world teetered toward financial collapse as a result of the 2007 and 2008 financial crisis. An elusive character called Satoshi Nakamoto then created a peer-to-peer system of electronic cash called bitcoin with a purported threefold aim. These were to wrest control away from those who created the financial crash; to create the first-ever money with a built-in monetary policy and that it would be totally transparent.
One of the most shocking aspects of the nascent industry has only come to light: the incredible amounts of energy cryptocurrencies like bitcoin require to be mined.
Researchers have calculated one dollar’s worth of bitcoin requires about 17 megajoules (MJ) to mine, as compared with 4, 5 and 7 MJ for copper, gold and platinum.
Alex Karasulu, Founder and CEO of blockchain-driven platform OptDyn, believes the hardware used to mine bitcoin can make the manufacturing the crypto that much cleaner.
He told Express.co.uk: “We have to have commodity mining again even if electricity is more expensive.
“But what we have to do is make more efficient equipment where the focus is on reducing the amount of power consumption.
READ MORE: How to buy Facebook’s Libra coin?
“We would need it to be expensive in terms of price so it forces us to make mining more efficient.
That is what we need to bring commodity mining back and we need it to be decentralised and not in the hands of farms.”
Mr Karasulu believes having hardware that is repurposable is a solution.
He added: “And that requires us to go to Field-Programmable Gate Array (FPGA)–based mining, which is a duo-programable gate array.”
FPGA is a new basic-resistant mining that is very efficient power-wise and can be repurposed.
What is bitcoin mining?
Bitcoin mining is a process of performing computer calculations validating transactions between different people across the world.
For the work these third parties are doing for validating these transactions, they are rewarded with newly created bitcoins.
Companies are also financially rewarded for taking the time and energy for processing these transactions.
Dr Max Krause told Express.co.uk exactly why such incredible amounts of energy are needed to mine cryptocurrencies like bitcoin, by contrasting them with more traditional forms of cash.
He said: “The calculation is designed to be energy-intensive or complicated so that it secure.
“It is supposed to be something considered to be ‘trust-less’ – meaning we trust the banking system to be there tomorrow.
“This is designed to be un-hackable – you don’t know the people who are processing these transactions, so it is called a trust-less system because the system is so secure.
“These secure calculations have to be fairly complex and therefore it requires a lot of computing power to repeatedly perform these calculations.
“The reason it consumes so much energy is really because there is a profit incentive to process these transactions, so companies are rewarded with coins for doing this work and the coins are quite valuable.
“And when you have both quite complex calculations and then a large profit, or incentive, an arms race of different mining groups creates these large energy requirements.”