Headline Feb 23, 2018/ ''' *VIRTUAL CURRENCY VAMPIRE* '''

''' *VIRTUAL CURRENCY VAMPIRE* '''

*THE ENERGY COSTS OF VIRTUAL CURRENCY* has begun moving backers to begin seriously looking for alternatives.

Creating a new Bitcoin requires electricity. And a lot, a lot of it.

In the virtual currency world this creation process is called *mining*. There is no physical digging, since Bitcoins are purely *digital*.

*But the computer power needed to create each digital token consumes at least as much electricity as the average American household burns through in two years, according to figures from Morgan Stanley and Alex de Vries, an economist who tracks energy use in the industry.

The total network of computers plugged into Bitcoin network consumes as much energy each day as medium-size countries - which country depends on whose estimates you believe.

And the network supporting Ethereum, the second-most valuable virtual currency, gobbles up another country's worth of electricity each day.

The creator of Ethereum, Vitalik Buterin, is leading an experiment with more energy-efficient way of create tokens, in part because of his concern about the impact that the network's electricity use could have on global warming.

''I would personally feel very unhappy if my contribution to the world was adding Cyprus's worth of electricity consumption to global warming,'' Mr. Buterin said in an interview.

But many virtual currency aficionados argue that the energy consumption is worth it for the grander cause of securing the Bitcoin and Ethereum networks and making a new kind of financial infrastructure, free from the meddling of banks or governments.

''The electricity usage is really essential,'' said Peter Van Valkenburgh, the director of research at  Coin Center, a group that advocates for virtual currency technology.

''Because of the costs we know that the only people participating are serious, but they are economically invested. That creates the incentive for cooperation.''

This dispute has its foundation in the complex systems that produce tokens like Bitcoin; Ether, the currency on the Ethereum network; and many other new virtual currencies.

All of the computers trying to mine tokens are in a computational race, trying to find a particular, somewhat random answer to a math algorithm.

The algorithm is so complicated that the only way to find the desired answer answer is to make lots of different guesses. The more guesses a computer makes, the better its chance of winning.

But each time the computers try new guesses, they use computational power and electricity.

The lure of new Bitcoins encourages people to use a lots of fast computers, and lots of electricity, to find the right answer and unlock the new Bitcoins that are distributed every 10 minutes or so.

THIS process was defined by the original Bitcoin software, released in 2009. The goal was to distribute new coins to people on the Bitcoin's network with a central institution handling out the money.

Early on, it was possible to win the contest with just a laptop computer. But the rules of  network dictate that as much more computers join in the race, the algorithm automatically adjusts to get harder, requiring - anyone who wants to compete to use more computers and more electricity.

These days 12.5 Bitcoins that are handed out every 10 minutes or so are worth about $145,000, so people have been willing to invest astronomical sums to participate in this race, which in turn has made the race harder.

This explains why there are now enormous server farms around the world dedicated to mining the Bitcoin.

THIS PROCESS is central to Bitcoin existence because in the process of mining, all the computers are also serving as accountants for the Bitcoin network.

The algorithms the computers solve require them to also keep track of all the new transactions coming onto the network.

The Honor and Serving of the latest ''Operational Research'' on Future and Technology and Virtual Currencies continues. And The World Students Society thanks researcher and author, Nathaniel Popper.

With respectful dedication to the  Students, Professors and Teachers of the world. See Ya all on !WOW! - the World Students Society and.................... Twitter-!E-WOW! - the Ecosystem 2011:

''' Bitcoin !WOW! Store '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless