Media Mention: Jim Verdonik on Technology Energy Hogs

When it comes to threats to the environment, things like pollution and climate change may come to mind, but should technology be on the list?

It's a question that fintech attorney Jim Verdonik ponders in his latest article featured in the Triangle Business Journal, entitled "Digital Collision Could be Coming." 

From the article: 

For many years, the dirty little secret of the digital world has been that it takes a massive amount of energy to run our digital world.

Silicon Valley likes to project a clean and green image, but the server farms that keep our digital world running consume vast amounts of electricity to process and store information of dubious value. What's the energy cost of millions of people looking a cute cat video?

The electricity needed to operate servers is just the first step. The servers also generate heat and more electricity is needed to air condition the server farms.

Silicon Valley has managed to hide its energy dependence for a long time, but blockchain and coin mining operations are blowing Silicon Valley's cover.

Blockchain and coins and tokens utilize a worldwide network of computers organized into "nodes." In an ordinary data network, data is stored on one server, but that opens the network to hacking. Blockchain networks protect data integrity by storing and processing the same data on thousands of computer nodes. Someone would have to hack thousands of nodes to change the data.

That solves Silicon Valley's vulnerability to hacking, but the massive duplication is an electricity hog. 

Of course, what is stored on the blocks of a blockchain isn't necessarily raw data. The blocks usually contain hashes that represent the data. Hashes can turn very large amounts of data into much shorter strings of data. The common 256-character hash may represent millions bits of information.

The purpose of a hash isn't to give you instant access to all the information. The purpose is to allow you to verify the information by comparing hashes. If all 256 characters of two hashes match perfectly, you know they represent exactly the same data.

The two biggest expenses of the people who operate the blockchain nodes are buying the computer hardware and paying the electric bills to operate them. Read more.

Jim leads Ward and Smith's fintech practice group in Raleigh. He is a frequent guest columnist for the Triangle Business Journal. 

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