How is Bitcoin proof of work productive?
Asked 3 years ago
I feel like Bitcoin's proof of work is hardly productive. It's not scalable either, so what is the point of it?
Silas Albert
Wednesday, March 23, 2022
Well, proof-of-work is the original consensus algorithm that offers security and ensure efficient continuity of the Bitcoin blockchain. While the use of graphic cards, computer resources and electricity may be considered inefficient, the problem ought to be from the inefficient sources of these energy. The banking system and tech companies run data centres facilities and transactions that burns far more than Bitcoin's annual electricity consumption.
Research from Galaxy digital has shown that Bitcoin consumes less energy than gold and banks. The current banking system uses 263.72 TWh per year, while the physical asset with the highest total value locked, (TVL), gold uses 240.61 TWh per year. At 113.89 TWh annually, Bitcoin consumes far less energy than most systems currently in place. Also consider that around 2,000 TWh of energy is wasted annually which is around 20 times the energy consumed by Bitcoin's proof-of-work mining.
Again there are innovations underway like those of volcano mining in Elsavador, and the redirection of wasted gases like Methane to mine more Bitcoin. Nothing here should be construed to mean that proof-of-work is efficient or scalable. There may even be an upgrade to the Bitcoin blockchain that would effectively make it a proof-of-work based blockchain like we have seen with Ethereum.
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