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Analysts are concerned that Bitcoin and cryptocurrency mining centers are spending too much electricity, and that the process of verifying cryptocurrency transactions could worsen the global environment.

Justification of mining in Bitcoin and cryptocurrencies

In December 2017, several analysts criticized the electricity consumption of Bitcoin and cryptocurrency mining centers, calling the mining process an “environmental disaster.” Earlier Cointelegraph reported that cryptocurrency mining will likely exceed electricity consumption of households in 2018.

Smari McCarthy of Iceland’s Pirate Party stated that excessive consumption for Bitcoin mining is not practical because the main use case of Bitcoin is for “financial speculation.”

“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”

If environmentalists and analysts perceive the main use case of Bitcoin and other cryptocurrencies to be financial speculation, the consumption of a massive amount of electricity could be considered impractical. However, the main application of Bitcoin is not financial speculation. In countries wherein the underbanked struggle to gain access to financial services, Bitcoin operates as an efficient currency.

In Venezuela, for instance, local residents are using Bitcoin to order food, basic goods and medicine from outside of the country because the Venezuelan bolivar, the country’s national currency, has lost almost all of its value, and has become virtually worthless.

Bitcoin’s proof-of-work (PoW) consensus algorithm uses global computing power to verify transactions and produce new cryptocurrencies through a mathematical system. The PoW system of Bitcoin disallows hackers from gaining access to the decentralized protocol and enables the Bitcoin Blockchain network to settle transactions on a peer to peer basis without intermediaries. Hence, to undermine the consumption of electricity to power decentralized currencies that are imposing a major impact on the global economy is illogical, and it is especially ill-judged to claim that the applicability of cryptocurrencies and Blockchain technology is limited to financial speculation.

Speculation exists in any sector that is

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