It feels like we are back in 2017 again. Bitcoin is topping at 35,000 dollars and making headlines all around the world.
Everyone knows what bitcoin is, but how much electricity does the bitcoin network and ‘mining’ actually consume? In this article we will look into how much, and why does bitcoin consume so much energy, and compare it to various countries to put it into perspective.
How does it work?
In order to “mine” Bitcoin, computers (also known as mining machines) are connected to the crypto-currency network.
They are tasked with verifying transactions made in the bitcoin network. This process involves solving complex puzzles. These puzzles are in place to verify that no-one fraudulently edits the record of all transactions. As a rewards miners occasionally receive small amounts of Bitcoin.
To make as much money as possible, miners connect many computers together, even entire warehouses. Since they are basically connected 24/7 they use a lot of electricity.
How much does it all add up to?
The University of Cambridge tool models the economic lifetime of the world’s Bitcoin miners. It uses world average price per kilowatt hour of $0.05. It also takes into account various efficiencies of mining machines.
The number they came up with is 90.72 TWh annually (current number which is constantly being recalculated). To put this into perspective thats more than countries like New Zealand (40 TWh), Czech Republic (59 TWh), or even Kazakstan (77 TWh).
Rising bitcoin prices make mining more attractive, as the potential reward increases in value. Therefore it is predictable that more speculators will decide to start mining bitcoin which will continue increasing its annual consumption.
How to lower Bitcoin’s electricity consumption?
If we turn off some of the mining machines we would lower the consumption only temporarily because we would lower its efficiency, which would attract new miners and the number of mining machines would return back to its previous amount. Only way how to lower overall consumption is to make mining machines more efficient.
Conclusion
Just as with other industries, only way how to lower overall consumption is by improving energy efficiency. For example if you work in the steel industry which also often runs 24/7 you can’t afford to turn off some of your machines. What you can do is make sure that your machines run as efficiently as possible and you are not paying for electricity than you have to. First step in improving your energy efficiency is monitoring.
If you want your company to become more efficient contact us at info@enectiva.cz.