By Anthony Matoria
Those familiar with Bitcoin are aware that it consumes an enormous amount of energy.  Estimates are that Bitcoin-mining consumes as much power as the entire country of Finland â roughly one-half of one percent of all of the electrical power generated on Earth.  The theory behind Bitcoin is that avoiding detection of fraudulent transactions should be more expensive in terms of time, effort, and energy than is keeping track of honest transactions.  There is necessarily some power required to keep track of honest transactions, and, in the case of Bitcoin, the power required is considerable.
The rationale behind the energy-intensive computer processing necessary to support Bitcoin was described in the original Bitcoin paper: “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”  The crucial point is that purpose of Bitcoin is to allow people to conduct transactions among themselves without a supervising institution such as a bank, while at the same time reassuring the transacting parties that the payment system is trustworthy.  Trust is necessary to any workable system of trade, whether that trust is in the other party to a transaction, a third-party intermediary, or a cryptographic system that makes fraud difficult to commit and easy to detect.  In the absence of such a system, fraud associated with internet commerce would be extremely difficult to control, given the vast number of jurisdictions that are potentially involved, stateless actors, and the relative anonymity associated with virtual interactions.
