aka Headlines that make me feel very old
Yesterday’s paper (the i) contained this headline. The article contained the following sentences:
“The energy consumption of mining for cryptocurrencies could rival the entire greenhouse gas emission output of Italy within the next two years if allowed to continue unchecked.”
“Bitcoins are created through mining, a process that requires computers to solve complicated mathematical equations …”
“(the authors of the study) used a simulated emission model to track the emission flows of bitcoin blockchain operations in China, …”
I have no idea where to start with comprehending this, but clearly my Economics A level is not the place. While I understood early that the financial rewards do not necessarily go to those who create the wealth, I still believe that fundamentally, in order to create wealth, value must have been added in the process somewhere along the line, even if the rewards end up somewhere else.
Can anyone explain to me this concept of ‘mining for currency’? I can cope with words of many syllables; I am not daft, but this is beyond me. How is there a process that creates an item of value – bitcoin – out of encrypted data? Who created the value in the blockchains in the first place? And won’t they want it back some day?
And how does it end up being more of a risk to the climate than, like, real proper mining with pithead baths and pigeon lofts?