I for sure, but possibly you as well, have the distorted perception that bits do not consume anything: they do not consume “space” they are fickle and do not consume power. Of course everything proves the contrary: our devices aer getting full and they need to recharge often.
When I am at a friend’s home I have no reservation to plug in my computer or my phone, likewise if I am sitting in a pub. I mean, what kind of expense would that generate? Close to nothing, and that is a fair assessment.
The problem lies in the “close to”. If you add nothing to nothing you get nothing, but if you add “close to” it soon start growing.
This is the case with bitcoin:
- the bitcoin blockchain is using (as of April 2021) some 116 TWh of electricity per year (it was 111.7 just four months before -see the graphic), corresponding to the 0.5% of the total electricity produced worldwide;
- the estimate of total (the above figures reflect power consumption in the centralised nodes) may reach 400 TWh yearly (the whole UK uses some 300 TWh of electrical power);
- if bitcoin were a Country it would rank 33rd in power consumption;
- two thirds of the electrical power used by bitcoin miners derves from fossil fuels (e.g. contribute to CO2 emission and other pollutants);
- for comparison all internet providers are using 200 TWh of electrical power per year, corresponding to 0.8% of global production.
The problem lies in the very mechanism ensuring the blockchain security. The more something becomes valuable, the more computation power you are throwing to it. Today the distributed ming systems supporting the creation of new blocks (in the blockchain) for bitcoins aree estimated to perform 160,000,000,000,000,000,000 (that is 160 quintilions) operations per second. There lies the problem: each of this operation consumes “close to” nothing, but once you do the math that “close to” becomes a monster number!
Some expert believes that the very structure (architecture) of blockchain is “economically” flawed and bitcoins will be forced to crash under their own success.
Of course there are also different -and widespread- concerns over bitcoin with respect to transparency and cross-border exchange. Just few days ago China has announced measures to stop 90% of the bitcoin miners in China…