Burgeoning demand of electricity from Bitcoin has attracted almost as much attention as the wildly fluctuating value of cryptocurrency. But estimating exactly how much of the electricity the Bitcoin network makes use of is necessary for the understanding of its impact and policy implementation remains much of a challenge. In the first rigorously peer-reviewed article that quantifies energy requirements of Bitcoin, a commentary appearing in the journal Joule, financial economist and blockchain specialist Alex de Vries has used a new methodology in a bid to pinpoint where electric consumption of Bitcoin is headed and how soon it might get there.
A Single Transaction Uses as Much Electricity as that of an Average Dutch Household Uses Per Month
de Vries, who works at the Experience Center of PwC in the Netherlands and is the founder of Digiconomist (@DigiEconomist), a blog that aims to better inform cryptocurrency users said that they have seen a lot of back-of-the-envelope calculations, but there is a need for more scientific discussion on where this network is headed to. A present, the information that is available is of pretty poor quality and so there is a hope that people will make use of this paper as a foundation for further research, adds Vries.
According to his estimates that are based on economics, the current minimum usage of the Bitcoin network stands at 2.55 gigawatts, which means that it makes use of almost as much electricity as of Ireland’s. A single bitcoin transaction makes use of much electricity as an average household in the Netherlands uses in a month.
Bitcoin is totally dependent on computers that time-stamp transactions into an ongoing chain so as to avoid duplicate spending of coins. Computers in the network perform does calculations constantly, thereby competing for the chance, once every ten minutes, to be appointed to create the next block of transactions in the chain. The user of the computer that wins is awarded with 12.5 new coins a process that is known as “mining” Bitcoin.
Protecting digital assets in the financial sector has largely been an uphill task, characterized by the lack of one-size-fits-all solution or potentially effective fixes. The problem increases in complexity as new financial technologies are being unveiled and digital communications systems keep evolving. Bitcoin, a popular cryptocurrrency that evolved out of recent innovations in global payment systems, has been the new buzzword in the financial security domain requiring constant improvements. Securing personal accounts and wallets related to Bitcoin has generated intense interest among researchers and scientists world over who aim at developing hack-proof communication systems. A recent study made by a team of computer scientists at the University of Edinburgh could identify critical holes in Bitcoin payment systems which make these systems vulnerable to hacks and security theft. They further suggested ways to improve the underlying technology by proposing fixes.
Encryption System Could Prevent Hackers Siphoning off Funds from Bitcoin Wallet
The intensive security analysis done by the scientists found that users’ privacy in Bitcoin wallets and the overall communication system could easily be compromised with. They conducted tests by developing a malware, which could intercept messages sent between hardware wallets and the various devices that manage them, including computers. The funds in the Bitcoin wallet could easily be accessed by hackers who would siphon them off to their personal accounts. To prevent this, the researchers suggested that a robust system that could encrypt these messages. Furthermore, the encryption could be applied across different payment models using Bitcoin wallets.
User Privacy of Paramount Significance
According to the lead researcher, despite using advanced hardware, accessing users’ information was no big thing for hackers. Essentially, he believes that a digital wallet should not only protect the funds but also secure the users’ privacy. The findings in the new research could act a basis for developing digital system for securing Bitcoin wallets and communication systems using other popular cryptocurrencies.
Virtual currency Bitcoin, also referred to as the alternative currency, is fast becoming a means of payment. The latest sector to have lapped it up for payment is the real estate in the U.S., particularly that in Florida. This is mainly because Bitcoin is offering foreign investors means to escape currency controls at home and also the U.S. economic sanctions.
By the end of 2017, the digital currency was used to pay for about 75 properties put up for sale, particularly in South Florida and California, according to the findings of the real estate firm Redfin.
In fact, homes for sale in Miami area actually flash a board saying “Bitcoin accepted” these days.
One seller has even gone to the extent of saying that he would only accept Bitcoin – precisely 33 of them – for his half-million-dollar worth condo in the downtown area of the metropolis of Florida.
Volatility of Bitcoin Poses Challenge
However, many agents are cautious on account of its high volatility.
Last year itself, Bitcoin surged over 14-fold to attain a value of US$19,000 a piece on December 16. There have been occasional steep plunge in its value too because of certain macro-fundamentals such as governments in various regulating it strictly.
Still, such transactions are seeing traction since they are useful for foreigners keen on investing in the U.S. real estate sector, but find it difficult to do so owing to the restrictions placed on the amount of money that can be transferred abroad via the banking system. Bitcoin allows them to bypass such restrictions. It lets them dodge US economic sanctions too.
A push to enable financial specialists to exchange advanced monetary standards as effortlessly as stocks bumbled when benefactors pulled back two proposition to list bitcoin stores. Intercontinental Exchange Inc’s (ICE.N) NYSE Arca trade on Wednesday pulled back an submission with the U.S. Securities and Exchange Commission (SEC) to list Grayscale Investments LLC’s Bitcoin Investment Trust (GBTC.PK).
Likewise on Wednesday, Van Eck Associates Corp pulled an enlistment record for a bitcoin finance in the wake of stating the SEC disclosed to them they will not survey the documenting until the point that prospects contracts on the computerized money begin exchanging.
Explaining the situation
“Albeit the market for digital currency control proceeds to quickly advance, as of now Grayscale does not accept there have been sufficient administrative improvements to incite the SEC to affirm the application,” Grayscale said in an announcement. They said they would proceed with their exchange with controllers.
The Bitcoin Investment Trust is as of now exchanged “over the counter” in less formal trades than those utilized for regular stocks and at far higher costs than the bitcoin it holds.
Offers exchanged down 3.2 percent to $715.50 on Thursday, far higher than the guarantor’s examination that its bitcoin resources are worth $386.60 per share.
Bitcoin can be utilized to move cash with relative obscurity, and without the requirement for a focal specialist, for example, a bank or government.
SEC endorsement could convey more financial specialists to the advantage, yet the administrative office has communicated questions over the bitcoin showcase being unregulated. The SEC declined to remark. NYSE couldn’t be come to.