Author: James Lu 2021-05-23 14:40:31
Published on: 2021-05-23T14:40:31+00:00
Bitcoin's energy consumption has been a topic of discussion lately, with some pointing out the negative impact it has on the environment. However, reducing the block reward to reduce energy consumption may not be an ideal solution as it can lead to decreased adoption and security concerns. Instead, users can prioritize "green" miners by giving them more transaction fees, which would create economic incentives to go green. This proposal would be great for making Bitcoin cleaner. Furthermore, Bitcoin's price has always been increasing faster than the block size has been decreasing, indicating that it's a self-balancing system. More people shouting about Bitcoin being dirty leads to less adoption, lower price, and less energy consumption. Additionally, reducing the block reward reduces the incentive to mine, which reduces the maximum energy price at which mining is profitable, thereby reducing energy use. It's important to note that Bitcoin currently consumes as much power as a small nation-state, which gives it nation-state security. A 51% attack can reverse recent transactions, but 99% of transactions don't need that level of security. If environmental-friendliness isn't improved, adoption will decrease, leading to a decrease in price, less mining, and eventually hurting security anyway. While there may be weaknesses to reducing the block reward, such as increased centralization towards Chinese miners, public discussion around Bitcoin's energy use may make it socially possible to ask individual users and major exchanges to install a version of Bitcoin with a reduced block reward. Finally, instead of outright rejecting transactions attempting to spend increased block rewards, they could be treated as no-ops.
Updated on: 2023-05-21T02:35:29.560240+00:00