If you haven’t heard of Bitcoin by now, you can’t blame the myriad media outlets who’ve been covering the boom in this virtual currency. Just like real currency, it has value and can be used to buy objects in the real world. And just like real currency, it requires resources to “mine” it. Bloomberg explains:
Mining is a process in which powerful computers create Bitcoins by solving processor-intensive equations. The idea is to keep the supply of Bitcoins from multiplying too quickly. Bitcoin mining, like mining of precious metals, is supposed to be arduous. By design, the more miners there are, the more processing power is required to mint new coins.
And even this sort of virtual mining has a real-world environmental impact. At a certain point, the huge amounts of processing power needed to mine Bitcoins translates into notable energy consumption:
Blockchain.info, a site that tracks data on Bitcoin mining, estimates that in just the last 24 hours, miners used about $147,000 of electricity just to run their hardware, assuming an average price of 15 cents per kilowatt hour … That’s enough to power roughly 31,000 U.S. homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.
It’s not exactly the same as using cyanide and other chemicals to extract gold from the ground. But it’s not all fairy dust and light, either.