Headline Jan 07, 2018/ ''' ! MINING GOLD VIRTUAL? '''

''' ! MINING GOLD VIRTUAL? '''

*MINING VIRTUAL GOLD* can be really, really dirty. 

Mining Bitcoin requires high-powered computer rigs that consume considerable amounts of electricity.

AS THE poster child for the growing ranks of computer generated currencies, Bitcoin's stratospheric price rises have propelled it from the chat-forum hosted depths of nerddom into the very global consciousness.

As it rose from under US$ 1,000  to over US$ 19,500 hordes of tech-savvy punters have rushed in to buy, while any investors can now do the same on the US futures markets.

BITCOIN has been called virtual gold, in part because it has been created in a process that insiders call mining. And like real mining, it can be very, very dirty.

THAT'S because joining the online gold rush to mine the coins that are streams of computer code requires high-powered rigs that consume considerable amounts of electricity to do the virtual equivalent of blasting through rock by solving a string of highly complex algorithms.

Depending how the electricity used for mining is generated, the virtual currency can have a very real impact by adding  pollutants  into the air and contributing to global warming.

OUT OF THE BEDROOM

WHAT  barely five years ago was hobby for ''bedroom miners'' has mushroomed into a massive, but unregulated industry that some observers fear is a bubble waiting to explode, potentially causing similar to- the sub-prime mortgages fiasco that caused the global economic crisis a decade ago.  

MINING involves ''adding value by dedicating computational resources to verify transactions in a  huge public ledger called a BLOCK-CHAIN,'' explained Julian Oliver, a New Zealander who uses  wind power to mine ZCash  - a Bitcoin cousin.

The miners are thus providing the computer resources for their currency's trading system to operate.

BUT the number crunching to pocket coins requires ever more powerful hardware and the means to keep then running, said Oliver.

''At current Bitcoin prices things are looking good for miners,'' he said, ''But it's a huge use of energy, whatever the profit margins [and is] not remotely sustainable.''

Specialist studies estimate the total annual energy output of the hundreds and thousands dedicated mining machines worldwide at 35 terawatt hours, according to Digiconomist website -some 25% up on last year.

That puts it on the level of energy consumption of Denmark.

EACH transaction consumes roughly 100kWh -the equivalent of running a lightbulb for three months. *By contrast, a credit card transaction uses about 0.2kWh.

But focusing on the electricity consumption of cryptocurrency mining ''ought not to overshadow pre-existing environmental costs of the traditional financial system'', said Oliver, as  cash need to be printed and transported and banks run off the backs of data centres''. 

CLEANING UP 

Nadine Damblon, chief executive of HydroMiner, which used hydroelectric power to mine in the  Austrian Alps, said there is a need for greater use renewables in the industry as Asian miners often rely on coal generated electricity.

Hydroelectricity can play a leading role as ''one of the most environmentally friendly ways to generate power,'' she said.

Damblon believes the market will help solve the problem.

''I think the case of  Bitcoin mining the capital will flow into more efficient hardware that will need less energy,'' said Damblon.

The scale of the long-term environmental threat that mining poses is unclear, as is the degree to which it could act as a catalyst for greater take-up of renewables.

IN ITS Global Cryptocurrency Benchmarking Study, the Cambridge Centre of Alternative Finance found that nearly three-quarters of all major mining zones are in China and the United States.

But the likes of Iceland and Austria are gaining ground. Not only do they offer clean hydroelectric power,  but also cold temperatures that help save on cooling computer equipment, which can account for up to a third of energy needs.

WHAT is undeniable, said the report, is that ''the mining sector has evolved in a short time from a hobby activity performed on personal computers into a professional and capital-intensive industry with its own value chain''.

As for how many bitcoin mines or miners there are now, nobody really knows. 

GREEN VS ANARCHIST

In terms of large-scale mines ''there are perhaps about a hundred,'' said French Information Technology specialist Marc Bevand.

''Maybe {there are) are a few thousand smaller ones'' using ''one or two racks'' of machines rather than the thousands in the largest Asian mines, according to San Francisco based Bevand.

The push for scale to save on energy costs and go green also risks pushing Bitcoin against its libertarian, or even anarchist, founding philosophy.

BITCOIN was created to not only allow secure and anonymous transactions, but for the system to be controlled by users and not by a government or a corporation.  

The push for scale ''would concentrate number-crunching power in the hands of the richest or throw into questions Bitcoin's [ decentralised ] philosophy,'' said Teunis Brosens, a senior economist with ING bank.

He forecasts that  eventually ''banks will create private block-chains which will not face the problems of scale or regulation'' which Bitcoin is coming up against..

With respectful dedication to the Technologists, Innovators, Students, Professors and Teachers of the world. See Ya all register on !WOW! -the World Students Society and Twitter-!E-WOW! -the Ecosystem 2011:

''' New !WOW! World '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless