Ethereum: Who pays for Bitcoin management expenses?
The Bitcoin Blockchain network and mining costs have been the topic of debate in recent years. As a leader of the Crypto Currency in the world by market capitalization, Ethereum plays a key role in allowing different decentralized applications (Apps) to act on their blockchain.
Electricity Consumption: High Costa Operation
Bitcoin mining, which uses powerful computers to solve complex mathematical problems, consumes a surprising amount of electricity. According to estimates, in 2020. It took about 70 hours for electricity for Bitcoin mining, about equivalent to the needs of the power of three nuclear power plants.
High energy consumption stems from the fact that Bitcoin miners use specialized hardware designed to address the complex mathematical puzzles that are needed to confirm the transactions on the network. The cost of energy is not only a financial burden, but also a significant concern for the environment.
Funds: Who pays for management expenses?
So who pays exactly for these high costs? Theoretically, electricity is expected to be paid by Fiat money, much like government paying tax costs. However, in practice, funding for the mining of Bitcoin and Ethereum was a complex problem.
Although there are some investors and companies that have provided financial support, most costs are still covered by individual miners, who have taken over the burden of electricity payment. This is known as “mining economy”.
Because individual miners have to pay
The reason why some miners have to pay their electricity is due to some factors:
- Scalability : Bitcoin’s miniization has become a multimillion -dollar industry and the demand for electricity is still growing.
- Cost : The cost of electricity has decreased significantly over the years, but the amount of electricity that the miners consume remains high.
- Profile profit
: Miners are not always able to transfer the full cost of their electricity costs to consumers. In many cases, they must absorb losses and keep their costs low.
The role of Ethereum: Decentralized Solution
Although some miners have the weight of costs, Ethereum also took measures to face the problem. In 2017, the Ethereum Foundation announced a plan to create a decentralized energy solution for their nodes, which would allow them to work on renewable energy sources.
To date, the Ethereum energy costs have been relatively low and the network has reached large steps in reducing the environmental impact. However, more jobs should be done to resolve the high cost of managing Bitcoin Blockchain and pulling out.
Conclusion
The cost of maintaining the Blockchain Network of Bitcoin and Mining is a complex problem that requires the cooperation of different parties in question. Although some miners have the weight of financial load, efforts are underway to reduce energy consumption and the process become sustainable. Although Ethereum continues to grow in popularity, it will be crucial to face these problems and ensure that the network remains environmentally friendly and economically feasible for all users.
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