Ethereum: Who pays for the operating cost of bitcoin?
The cost of maintaining the Bitcoin network blockchain and mining has been the subject of discussion in recent years. As the world’s leading cryptocurrency, the market capitalization plays an essential role in allowing various decentralized applications (DAPPS) to operate on its blockchain.
Electricity consumption: highly costly operation
Bitcoins, which uses powerful computers to solve complex mathematical problems, consumes an amazing amount of electricity. According to estimates, approximately 70 terawatts (TWh) of electricity were needed in 2020, which is roughly equivalent to the energy needs of three nuclear power plants.
High energy consumption comes from the fact that Bitcoin miners use specialized hardware designed to solve complex mathematical puzzles needed to verify transaction in the network. Energy costs are not only a financial burden, but also a significant environmental interest.
Funding: Who pays for operating costs?
Who exactly pays for these high costs? Theoretically, electricity is expected to be paid by Fiat money, like governments, pay their taxes. In practice, however, the financing of Bitcoins and Ethereum mining is a difficult problem.
Although there are some investors and companies that have provided financial support, most of the costs are still covered by individual miners who have taken over the burden of paying for electricity. This is known as the “mining economy”.
Why do individual miners have to pay
The reason why individual miners have to pay for their electricity is due to several factors:
- Scalability : Bitcoin extraction has become a few million dollars industry and demand for electricity continues to increase.
- Price : The cost of electricity has fallen significantly over the years, but the volume of electricity consumed by miner remains high.
- In many cases, they must absorb losses and maintain their cost at low.
Task Ethereum: Decentralized solution
While individual miners carry the burden of cost, Ethereum also took steps to solve this problem. In 2017, the Ethereum Foundation Foundation announced a plan to create a decentralized energy solution for its nodes that would allow them to run on renewable energy sources.
To date, Ethereum’s energy costs have been relatively low, and the network has made significant advances in reducing its environmental impact. However, it is necessary to do more work to solve the high cost of starting the blockchain bitcoins and its mining.
Conclusion
The cost of maintaining the Bitcoin Blockchain network and mining is a complex problem that requires cooperation from various stakeholders. While individual miners carry the burden of financial burden, efforts are made to reduce energy consumption and increase the sustainability of the process. As Ethereum continues to grow in popularity, it will be necessary to solve these problems and ensure that the network remains environmentally friendly and economically viable for all users.