Blockchain technology has eliminated the presence of third parties. And because of this, it has allowed users to transact among themselves without a third party confirming the transaction. Fundamental to the operations of blockchain technology is the presence of miners. Miners are the ones who confirm transactions using their powerful computers that run 24/7.
Miners participate in confirming transactions mainly because they are rewarded by cryptocurrencies. However, it is no longer easy to mine cryptos. Gone are the days when your own computer at home can be used to mine.
One of the things that make crypto mining expensive is the fact that it spends so much energy. In addition to this, miners also have to spend a good amount of money on hardware that they have to update every now and then.
Because of the great amount of energy required in mining, miners have to find a suitable place where they can install their cryptocurrencies. China and Canada are among the top choices for miners. Cold places and countries selling cheap electricity can be ideal for this operation.
Romania’s Inaction Against Crypto Mining
Another country that has an increasing number of miners is Romania. For ex-energy minister Razvan Nicolescu, this isn’t a good thing. He mentioned on Thursday that this could greatly influence the energy sector due to the increased electricity consumption. He is also concerned about the lack of action by the government.
Nicolescu wrote on his Facebook page “A phenomenon that could greatly influence the Romanian energy sector is underway. In our country, more and more servers are being installed for cryptocurrency mining with a major impact on the increase in electricity consumption”
Razvan Nicolescu is currently the energy & resources industry leader at Deloitte Consulting. He believes that Romanian authorities should keep an eye out on the mining industry. He mentioned that “generally, the authorities are showing lethargy and a lack of priorities that start to bother me! Is it good to suddenly increase our energy consumption? What is the impact on the economy? But for the population? Is it okay what’s going on? Is it bad what’s going on?”
67 Terawatt Hours Annually
According to bitcoin analysis website Digiconomist, miners make use of more than 67 terawatt hours (TWh) yearly. Because of the computational requirements, crypto mining consumes a tremendous amount of energy.
In 2017, Bitcoin mining surpassed the annual energy usage of 159 countries. In fact, Bitcoin mining’s consumption has exceeded the total electricity consumption of some African nations and even that of Ireland.
In fact, in a paper that was published in 2014 by researchers from Hamilton Institute at National University of Ireland Maynooth, they concluded that “the cost of Bitcoin mining on commodity hardware now exceeds the value of the reward”.
They also mentioned that “the competition created in mining for Bitcoin has (led) to a situation where, in order to be financially viable, the hardware has had to become faster and more efficient”.
And because of the competition in the mining industry, there are some miners that have resorted to using malware that siphon computational power from other people’s computers.
