Love it or hate it, it’s hard to avoid it. BitCoin is never far from the news, whether it’s a new pronouncement by Elon Musk, or a new spike in price on the never-ending rollercoaster of crypto currency markets. One subject that continues to haunt the currency is its power consumption, but just how much power does BitCoin use, how does it use it and what impact does this have on the environment.
BitCoin’s rise to credibility
BitCoin began life as a bit of a specialist idea, with tech nerds mining it in their mom’s basements, but it has quickly risen to be an accepted currency. These days, it can be used for everything from buying one of Musk’s Tesla cars, to live betting on the big game. Despite its continuing fluctuations, BitCoin has become big business. At the time of writing, one BitCoin is worth almost $40,000, which is a world away from its original value for those basement miners.
What’s the problem?
As BitCoin has risen in value, it has become a business in itself, with BitCoin mining operations taking on an industrial scale. This in turn means that BitCoin mining has become harder, with ever more complex puzzles needing to be solved, requiring ever more powerful computers. A single BitCoin takes ten minutes to mine, with the machines involved processing as many as 120exahashes or 120x 1018 calculations per second. Assuming one exahash per second consumes a gigawatt of power, each individual BitCoin takes 72,000GW of power to mine.
It all adds up
Estimates of global BitCoin power consumption vary wildly, but last year, a team from the Cambridge Centre for Alternative Finance (CCAF) estimated it to be as high as 121.36 terawatt hours per year. To put that in perspective, that’s more power than Argentina consumes in a year, and almost as much as Sweden or Malaysia. In total, BitCoin mining consumes around 0.55% of all global power.
Power in context
Of course, power consumption does not directly equate to damaging emissions, and many BitCoin mining operations are located where power is cheap and green. For example, in the Sichuan and Yunnan regions of China, hydroelectric power generation far outstrips local demand, creating a surplus of clean, green energy. BitCoin miners understand this and have moved into the regions en-masse to access this cheap and renewable energy. Around 50% of all global BitCoin mining takes place here during the wet season, halving the potential emissions in the process.
A limited supply
It is possible that the BitCoin power consumption problem will go away of its own accord. The total supply of BitCoin was set at 21million, of which 18.5million have already been found. Assuming that the protocol is not changed, BitCoin energy usage will inevitably dwindle and eventually cease as the supply dries up. This just leaves the energy used for transactions, which is a fraction of the power needed for mining them in the first place.
Finding a balance
The energy consumption of BitCoin may seem shocking, but it is no higher than the power wasted by devices on stand-by in the United States every year. What’s more, much of that wasted energy is produced using far more environmentally damaging generation processes than the power used for BitCoin. Unfortunately, the cost of leaving your TV on does not make as compelling a story as the bad boys of BitCoin destroying the planet. At the end of the day, we all have our role to play in conservation, whether we’re on a home PC or in a huge BitCoin warehouse.
