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The fears about the energy consumption of cryptocurrency mines have been temporarily placated by a slip in the value of cryptogenins, including bitcoins itself.
The world's most famous cryptocurrency was trading at around $ 3,700 at the end of November, down nearly 55 percent from $ 8,200 a year ago and more than 79 percent from its record high of $ 17,900 in December 2017.
Bitcoin has been trading at a fairly stable rate between $ 5,000 and $ 7,000 since June, but has begun to slip in mid-November onwards. It lost almost 41 percent in value between November 13th and November 26th, sparking panic among the cryptic investors.
"Bitcoin is in crisis," Bloomberg exclaimed. "The behavior of virtual currency from the beginning of the year does not resemble an exploding bubble, it looks more like a currency under attack."
Other important cryptocene did not go better. At the end of November, the second largest in the worldblockchainthe currency, ethereum, was down by around 78% compared to a year ago and by 92% compared to the historic high in January.
And the bitcoin money, widely regarded as the main competitor of bitcoin, was down 89% from a year ago and 97% from the December 2017 peak. Bloomberg noted that the depreciation of the currencies from December last year, it canceled about 700 billion dollars from cryptocurrency markets.
This is the same amount used to save US banks after the subprime mortgage crisis in 2008. Most of the decline in cryptocenetic values occurred at the start of this year, when investors were caught by the panic at the prospect of regulatory repressions in key markets like China.
Like bitcoin, however, the money from ethereum and bitcoin has been fairly stable in the last few months. The reason for the last decline is not clear, even though some observers have accused the uncertainty of a planned division, or "a fork" of bitcoin money to form a new currency.
While further losses are bad news for investors, the crypto crash could have a silver lining in terms of overall energy consumption. Blockchain-based cryptocurrencies are traditionally based on a process called proof-of-work for the validation of transactions and the creation of new currencies.
The proof of the work is based on solving computational problems that increases in difficulty together with the value of a cryptogen, a process known as mining. In the case of bitcoins, it is believed that the processing effort requires as much energy as a medium-sized country.
Bitcoin energy consumption concerns have not diminished since the currency lost much of its value at the start of 2018, because the previous peak of cryptocurrency has stimulated the creation of a series of alternative coins based on blockchain.
Also at the beginning of November, a document in Nature he stated that the extraction of cryptocurrencies for four popular currencies – bitcoin, Ethereum, Litecoin and Monero – was absorbing more energy than the extraction activities of real life, for an equivalent market value.
"While the market prices of currencies are quite volatile, the hashrate network for three of the four cryptocurrencies has recorded a steady trend towards the top, suggesting that the energy needs will continue to increase," the authors have worried.
There are signs that the latest fall in cryptographic values may have changed the image, though.
According to the Digiconomist Bitcoin Energy Consumption Index, created by PricewaterhouseCoopers data consultant and blockchain specialist Alex de Vries, bitcoin energy consumption fell 27 percent in the last two weeks of November.
The cryptocurrency uses even more energy than Bangladesh, though.
Scott Clavenna, president of Greentech Media at Wood Mackenzie Power & Renewables, said that the bitcoin's high energy consumption is not only a problem of sustainability, but also a problem for those who dream of a truly decentralized currency.
"Mining was a classic double-edged sword," he said. "Being a premium-based approach to protecting a network, it has proven effective in supporting the growth of bitcoins and other cryptocurrencies, but it has also led to a couple of unfortunate outcomes."
As the price of bitcoin rises, it also increases the incentive to invest more in energy-hungry mining equipment, he said.
As a result, the mining ecosystem has consolidated around players who can afford huge mining operations or join in vast mineral pools.
"Today we have a bitcoin market that consumes huge amounts of electricity for questionable value, while not providing a real decentralization of a financial system due to mining consolidation," said Clavenna.
"The fall in the price of bitcoins can be considered positive in this light Reducing the premium for the mining sector is the only way to reduce the overall energy consumption of the network and could also have an impact on further consolidation" .
Jesse Morris, chief commercial officer of the blockchain platform developer Energy Web Foundation, added: "It will be very interesting to see what will happen to the size and energy intensity of the bitcoin mining pool in particular."
Many miners will abandon the bitcoin network because the current price can not cover the cost of mining operations, he said. At the same time, however, with fewer participants in the bitcoin mining pool, the difficulty of the algorithm should decrease.
"I'm not entirely sure what will happen to net-net energy consumption, but it will be very interesting to see how many miners leave the market in this crisis," Morris said.
"However, for those companies that actually use blockchain and digital technologies to solve problems in the real world, work continues."
