Can Quantum Computing Save Bitcoin From Itself? | OilPrice. com

 Can Quantum Computing Save Bitcoin From Itself?  |  OilPrice. com

It has been a volatile year for the cryptocurrency industry, to put it mildly. The industry has faced unprecedented levels of scrutiny, scandal and bad press thanks to high-profile fraud and financial missteps such as the collapse of cryptocurrency exchange FTX and cryptocurrency-based hedge fund and the subsequent indictment of its now infamous co-founder and CEO Sam Bankman-Fried.

While most of the hype has since died down, the industry remains under a regulatory microscope and many companies are still embroiled in litigation. Just this month, the Securities and Exchange Commission sued two cryptocurrency companies in two days for alleged misconduct: Binance, the world’s largest cryptocurrency exchange, is accused of operating an illegal trading platform in the United States and of misused client funds, while Coinbase, the largest crypto platform in the country, failed to register as an exchange, a legal requirement.


But the cryptocurrency appears to have survived its dark night of the soul and come out the other side with a surprising rebound. Indeed, as Bitcoin prices have increased in recent months, mining operations have also increased and their associated carbon footprint. Despite all the industry uncertainty, Bitcoin’s carbon emissions are currently at an all-time high, using nearly as much energy per year as the entire nation of Austria, according to the University of Cambridge’s Bitcoin Electricity Consumption Index. And that staggering energy footprint will almost certainly continue to balloon as proof-of-work problems become increasingly complex for miners to solve.

Bitcoin’s shocking energy consumption is the result of the cryptocurrency’s mining process, which relies on a public ledger powered by the blockchain. In order for Bitcoin transactions to remain secure, authenticable and anonymous, each entry in the ledger is obtained through the solving of complex computational problems, a process known as “proof of work”. The “miner” who solves this puzzle fastest receives a freshly minted Bitcoin in return for his efforts. “Proof-of-work” is a process of pure trial and error: inserting random solutions and hoping for the best results. This means that high-powered supercomputers, which can perform more calculations in a shorter time, have an advantage.

But to keep the currency from being devalued as more and more miners mint new coins, the proof-of-work solution becomes more and more difficult depending on the level of competition. By design, mining a Bitcoin always takes about 10 minutes. As a result, Bitcoin miners are constantly having to use more and more computing power and often have entire warehouses full of supercomputers at work. The result: the same amount of Bitcoin produced each year, but with ever-increasing energy consumption and carbon emissions. In 2009, you could mine Bitcoin using just a few seconds of household electricity; now, you should consume about 9 years.

But there may finally be a solution to this compound problem: quantum computing. Second recent report from CoinsPaid Media, systems based on quantum computing have been modeled to be “vastly superior to classic mining equipment in terms of energy efficiency”. This finding is based on a study by researchers at the University of Kent in the UK, who compared the power consumption of three different quantum computers when mining cryptocurrencies using the blockchain.

The resulting potential energy savings are staggering. “We show that the transition to quantum mining could result in relatively conservatively estimated energy savings of approximately 126.7 TWH or, in other words, Sweden’s total energy consumption in 2020,” the study says. And, unlike traditional mining equipment, which is already extremely advanced in its technology, quantum computers are still in their infancy and will likely get more refined to be even more energy efficient in the near future.

However, this discovery has some important caveats. “Quantum mining is only energy efficient when using equipment with around 512 qubits,” CoinsPaid Media explains. “Meanwhile, the most powerful quantum processors on the market, IBM Osprey and D-Wave D2, have only 433 and 512 qubits, respectively.” More importantly, quantum computing it just isn’t that evolved yetand it will still have a long way to go before it can feasibly make these kinds of savings. Quantum computing could save the climate from Bitcoin, but it won’t be soon. And the timeline to avoid the worst impacts of climate change is short.

By Haley Zaremba for Oilprice.com

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