Another hard thing to ignore is the amount of energy used by miners. As bitcoin has got more popular – not civilian-popular, but nerd-popular and cutting-edge-capitalist-popular – the mining process has had more and more computer power thrown at it. The process is wasteful, since most of the mining, most of the time, is by definition unsuccessful, because only one miner wins the race. As Vigna and Casey point out in Cryptocurrency, by the middle of 2014, the bitcoin network, which
was then producing 88,000 trillion hashes every second, had a computing power six thousand times the combined power of the world’s top five hundred supercomputers … And just two and a half months later, it had almost trebled to 252,000 trillion hashes. The world has seen nothing like this level of computational expansion. That’s why some doomsayers are predicting that if bitcoin continues on its present path, the planet faces an environmental catastrophe.
The amount of energy used by the computers attached to the network can’t be sustained. This is some way off, but there’s no denying that the process of mining is inherently wasteful. (Bitcoin miners have a preference for setting up in places where it’s cold, to cut down on their air-conditioning bills.)
There will only ever be 21 million bitcoin: the finite nature of the currency was Satoshi’s way of making sure that, unlike the fiat currencies that governments are free to abuse, nobody could ever destroy the value of bitcoin by arbitrarily deciding to create more of it. The schedule is for these bitcoin to be created over the course of 130 years. As more computing power is added to the network, it becomes necessary to make the mathematical challenges harder, to slow down the miners’ progress. That’s where that string of zeros at the start of the proof of work comes in handy: changing the number of zeros immediately affects the difficulty of the calculation, to slow down the mining of the coins. But this does mean that an awful lot of energy is going to waste. It’s an ugly side effect to a system of great intellectual elegance.
When Bitcoin Grows Up