Friday, January 12, 2018

National and local governments may intervene in cryptocurrencies simply because they could become a national emergency to the power grid

As the length of time within the Bitcoin algorithm continues to expand as we head towards the final five million Bitcoins to be mined, the electrical cost to perform this function will also increase exponentially.  In fact according to many sources, the average cost of electricity to mine a single Bitcoin as of December was 215 KWH and approximately $4200 if done in the United States.

However as we noted above the cost, as well as amount of electricity to mine just a single Bitcoin, will only increase exponentially, and it is this factor that could see either national or local governments intervene to potentially bring a halt to this industry as Bitcoin mining could quite possibly shutdown a local or regional electrical grid.

The cryptocurrency craze is helping many people rake in money, but it is also putting pressure on the electrical infrastructure of a small county in Washington state. 
"Our infrastructure is actually being put to the test. We're full," Ron Cridlebaugh, the Port of Douglas County economic development manager, told CNBC's Michelle Caruso-Cabrera on Thursday. 
Electricity in Washington state is considerably cheaper than in most places in the U.S. The average electricity price per kilowatt in the state is 4 cents. The national average is 7 cents. 
Cryptocurrencies such as bitcoin and ripple have skyrocketed in value recently. Last year, those digital currencies surged 1,500 percent and 35,000 percent, respectively.
People have been trying to get in on the action by purchasing these digital assets or by "mining," or creating, them. But the mining process requires a lot of electrical power as computers process gargantuan amounts of data. 
Cridlebaugh said the county is building out 100 megawatts (100,000 kilowatts) of infrastructure just in data centers to keep up with demand. "It's going to take some time to catch up because growth has been so quick." - CNBC
What is perhaps the most scary about this growing concern is that these costs are only for one single cryptocurrency (Bitcoin).  And with 1400 of them now online as of the end of 2017, mining operations for just a few of them could one day soon see the majority of the world's electricity being dedicated to the accumulation of virtual tokens.


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