A new contributor to the Bitcoin (BTC) energy debate says that 1 BTC would have to cost $20 million to use 100 times its current energy demands.
In a Twitter debate on Monday, Sjors Provoost, a Bitcoin developer and author of Bitcoin: A Work in Progress, cast doubt on the largest cryptocurrency’s future energy use.
Bitcoin could survive on “waste energy breadcrumbs”
How much energy Bitcoin uses to survive has become a topic of friction that has gone from within the industry to global government.
Throughout the process, Bitcoin proponents have complained that a combination of bias and lack of understanding of network principles are leading those in power to make incorrect conclusions about how and why Bitcoin uses the energy it does.
While critics argue that Bitcoin must reduce its energy consumption, others explain that Bitcoin, in fact, uses energy that would often otherwise be wasted or inaccessible.
Discussing the status quo, fellow developer Matt Odell published a graphic showing that Bitcoin mining currently only uses 0.49% of the world’s wasted electricity and 0.16% of electricity overall.
Responding, Provoost calculated that for energy use to increase proportionally with changes in the Bitcoin network’s preprogrammed changes, it would have to become an “absurd” $420 trillion entity.
“In 10 years the block subsidy will be ~10x lower (3 halvings). In order to get 100x today’s energy use, Bitcoin would have to trade at $20M by then (plus energy cost inflation adjustment),” he wrote:
“But a $420T market cap is absurd, more than ALL real estate.”
Bitcoin’s halving cycles mean that the block subsidy — the amount of “new” BTC added to the supply per mined block — halves roughly every four years. Each time, the mining ecosystem competes for less BTC, and thanks to Bitcoin’s proof-of-work (PoW) mining algorithm, remains incentivized to do so, devoting more hardware to their endeavors.
More hardware means more power, but at the same time, the smaller reward, more efficient hardware and greater impact of transaction fees on miner revenue should keep energy use in check, Sjors says.
“Another 12 years later and even if Bitcoin is worth more than all the worlds real estate, the mining subsidy would not be enough for Bitcoin to use more than 1% of global energy,” he continued, noting that his calculations were not verified:
“So if nothing weird happens before 2030, it can probably keep running on waste energy breadcrumbs.”
Miners’ struggle is real
This was in evidence in recent days as over 14,000 BTC left miner wallets — a signal that miners were choosing to sell funds to stay afloat.
These “capitulation” events among the mining community have traditionally accompanied macro price bottoms.
Versus its most recent all-time high in November 2021, BTC/USD has lost up to 74.5%.
The Puell Multiple, a metric that compares the value of newly-issued BTC relative to the 365-day moving average, currently sits near historical lows.
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