Controversy: I paid for the electricity and bought the equipment myself, so why do you say Bitcoin mining is a waste of resources?

Blockchain is still very popular, as can be seen from the various "3:30" groups in the circle of friends today.

Of course, at present, the biggest hot spots in the blockchain economy are still: issuing coins and "mining".

Nowadays, when people talk about "mining", their first reaction is no longer to dig deep underground for coal or copper, but to set up high-performance servers, pull up wires, connect to the Internet, and start mining Bitcoin and Ethereum.

Recently, there is a controversial question: Is the "mining" of virtual currency a "waste" that is not beneficial to the economy? So how much resources does the so-called "mining" consume? Let's find out.

At present, the power consumption of Bitcoin mining is difficult to estimate. The estimated range based on public data is also relatively large, and is expected to be between 1 and 4 gigawatts, equivalent to 1 to 3 nuclear power plants, or 0.14% of the world's electricity consumption.

In 2018, many organizations predict that mining electricity consumption will be equivalent to the national electricity consumption of Singapore, or the electricity consumption of 4.5 million households, and the annual carbon dioxide emissions will reach 24,000 metric tons.

Currently, 58% of the "mining farms" are still in China and 16% are in the United States. However, as the two governments' policies in this regard become stricter and local electricity costs increase, more mining machines are being dispersed to countries and regions with loose policies and sufficient and cheap electricity.

Iceland is a typical example. We all know that it is a small country with a small population and beautiful scenery, but it has abundant electricity resources, and there is even nowhere to use it. Therefore, it has traditionally been the data center of some IT companies, so it is natural to further divide it into some Bitcoin mines. Moreover, Iceland's electricity comes 100% from renewable energy, which has little impact on the environment.

Of course, electricity consumption is one aspect. Many production activities use electricity, including factories, schools, hospitals, and our daily entertainment life. The key is the value of the electricity conversion. Factories use electricity to produce industrial products, schools use electricity to educate talents, hospitals use electricity for health and even to save lives, and entertainment electricity is a pleasure that everyone can feel, not to mention that it is also an industry in itself.

What about Bitcoin? What is produced? Some binary code? In the final analysis, whether Bitcoin wastes resources is not the key point, but the difference in the understanding of the value of Bitcoin as a virtual currency is the key point. The so-called "waste" is essentially the belief that resources are used but "useless" and no value is generated.

However, Bitcoin investors will say that Bitcoin has a price in transactions. To put it bluntly, it is a "store of value". Moreover, humans are economic animals. If it has no value, why would so many people spend so much money on "mining"? Moreover, mining stations also pay electricity bills, so how can it be "wasted"?

This leads to a second level of disagreement. Whose value is Bitcoin? The holders, especially the early holders, have become rich, so the electricity consumption of mining is just a drop in the bucket for them. However, in the eyes of more people, this is a "virtual" thing. Factories can create jobs, and rising stock prices of listed companies can also make investors rich. Bitcoin seems to only make a few people rich and is "useless" to society.

Yes, after jumping out of this, we discovered the essence of the problem, which is not that mining wastes electricity, but:

1. Does this electricity consumption generate value?

2. How much value does Bitcoin have to society?

It is often difficult to convince anyone of such questions from a rational and logical point of view. It is worth noting that, despite increasingly strict supervision, virtual currency "miners" are still stubbornly expanding their space. So, let practice answer the question. Perhaps one day, when blockchain technology, including virtual currency, is no longer just a transaction item, it will become a technology that everyone can perceive and improve their lives, and the controversy over mining power consumption will stop.