There are many different opinions on mining cryptocurrencies. Some see it as a waste, whereas others acknowledge it strengthens individual networks. Moreover, it allows for a somewhat “fair’ distribution of mining power and rewards. According to IMF’s Christine Lagarde, mining cryptocurrency is too expensive and too energy-consuming. It’s evident she has a valid opinion but offers very little solutions in this regard.
It is evident the IMF is under a lot of pressure when it comes to cryptocurrencies. Although they aren’t planning to regulate anything, everyone wants to know their thoughts. When it comes to mining Bitcoin, Christine Lagarde is not all that positive whatsoever. In fact, she is convinced mining Bitcoin is too energy angry. An interesting choice of words, although there is little to be done about it. She is concerned the system will consume as much electricity as Argentina in the next year.
Christine Lagarde Doesn’t Like Bitcoin Mining
No one will deny mining cryptocurrencies is energy intensive. It has always been like that, even though the hardware has become more efficient. Right now, the Bitcoin network consumers over 37 gigawatt-hours per day. That is quite a lot of electricity which needs to be generated first and foremost. Luckily, some big mining firms are moving to regions with cheap and renewable electricity sources. The rest of the world, unfortunately, does not have that luxury whatsoever.
It is unclear what Christine Lagarde plans to do about this situation, though. Her comments indicate nothing specific. Some people will see it as a hint at regulating Bitcoin mining in the future. It is certainly possible we will see guidelines in this regard. How that will play out exactly, is anybody’s guess. After all, the IMF has no jurisdiction when it comes to matters like these. All Lagarde can do is voicing concerns and hope someone will listen.
With over 80% of all bitcoins mined already, it is evident the energy consumption will remain in place. Fewer coins to mine and a higher mathematical difficulty force users to keep adding hardware to the network. As such, the consumption will continue to increase. Lagarde will not be too happy about that development whatsoever. It is an interesting situation worth keeping an eye on over the next few years.
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