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Why and How Bitcoin Consumes Energy

Bitcoin’s energy consumption is complex and often misunderstood, so this rabbit hole provides some resources to help understand this topic.

Lyn Alden

Created by Lyn Alden

@lynaldencontact

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Bitcoin uses a proof-of-work protocol to operate the network, which means that miners expend real-world resources (electricity) in order to validate transactions and secure the blockchain. Rather than being a bug, this is a feature because it is what keeps the protocol decentralized.

Other consensus protocols such as proof-of-stake may have their use-cases, but they make numerous trade-offs compared to proof-of-work. They are far more complex, with more attack surfaces, and are prone to centralization over time.

In addition, Bitcoin miners use energy in a very unique and useful way. Specifically, unlike data centers or other types of electricity consumers, individual Bitcoin miners don’t require very high uptime or a lot of internet bandwidth, which means they can go to areas of stranded energy production or can be co-located with power generation facilities as load balancers.

Bitcoin’s Energy Usage Isn’t a Problem. Here’s Why.

LynAlden.com
Lyn Alden on LynAlden.com
This is my primary longform research piece that analyzes the Bitcoin network’s energy consumption from multiple angles, discussing its scaling and the unique way that it uses energy.
Read on LynAlden.com
Bitcoin’s Energy Usage Isn’t a Problem. Here’s Why.

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Lyn Alden

Lyn Alden

@lynaldencontact

Lyn Alden has a background that blends engineering and finance. As a former electrical engineer and current financial analyst, Bitcoin’s energy consumption is a topic that is of particular interest to her, especially because it is so broadly misunderstood.

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Why and How Bitcoin Consumes Energy

A Rabbit Hole by Lyn Alden

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© 2022 Swan Bitcoin

Electric Solidus LLC
26565 Agoura Rd Ste 200
Calabasas, CA USA
hello@swanbitcoin.com
+1.218.379.7926

Swan Bitcoin does not provide any investment, financial, tax, legal or other professional advice. We recommend that you consult with financial and tax advisors to understand the risks and consequences of buying, selling and holding Bitcoin.