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High Energy Consumption

Why does the Bitcoin-Network consume so much electricity?

 

The bitcoin network needs a lot of electricity because of the mining consesus it uses.

The mining consesuns is a way how the miners are able to agree about valid transactions.

There has to be an algorithmn which selects a miner who shows his record of valid transactions to all the other miners. The other miners have to check if this proposition of the selected miner is right (by checking checksums and hash values). If more than 50% agree with the proposed transactions, the block gets added to the blockchain and the selected miner gets 12.5 bitcoin.

There are 3 important ways to arrange consensus between the miners in a blockchain:

  • Proof of Work
    • Used by most crypto currencies
    • High energy consumption
    • Easy to implement
  • Proof of Stake
    • Hard to implement
    • Low energy consumption
    • Very rare
  • Proof of Importance
    • Even harder to implement
    • Low energy consumption
    • Very rare