The amount of electricity consumed by computers keeping up with the bitcoin mining goldrush is greater than the annual usage of nearly 160 countries, according to new research. A study from energy comparison site PowerCompare.co.uk has reported that the amount of energy expended in mining bitcoin globally already exceeds consumption in Ireland and most African nations.
PowerCompare has adapted statistics gathered from cryptocurrency researcher Digiconomist and their Bitcoin Energy Consumption Index. The data shows, since the end of October, that the amount of energy consumed by mining Bitcoin on a worldwide scale has risen from just under 24 TWh per year to 29.05 TWh per year. This is already in excess of Ireland’s total estimated yearly electricity consumption, at 25 TWh per year.
Proportionally, the total amount of electricity sapped by mining Bitcoin is now in excess of 0.13% of global electricity consumption. According to PowerCompare, if the Bitcoin network was a country, it would rank 61st in the world in terms of electrical needs.
The recent growth in these needs may be attributed to Bitcoin’s rocketing value. Bitcoin is the most valuable of the world’s cryptocurrencies, and the value of a single coin has increased this year alone from £764 (January 1st) to £6540 (27th November).
The ‘mining’ process involves signing off on transactions made using the bitcoin network, a complex process involving a lot of computing power. By verifying these transactions, users are rewarded with fresh bitcoin, hence the name of the process.
Estimated revenue from Bitcoin mining now totals £5.4 billion, while running costs are at £1.1 billion. According to Business Insider UK, running costs are so high because Bitcoin’s creators designed the system to contain a limited number of coins (a maximum of 29 million). To ensure the survival of the system, the cryptographic processes involved in mining are becoming progressively harder, hence the creation of dedicated mining farms filled with thirsty GPUs.
The real price to pay?
In a recent article published by The Guardian, academic and author John Naughton noted the rising costs of the world’s digital ecosystem. According to Naughton, 7% of the world’s electricity supply is now consumed by our computer and online system, and this is only expected to increase to 12% by 2020 and rise annually about 7% through to 2030.
The majority of Bitcoin mining is done in China, where costs are comparatively cheaper than the US and UK, for example. According to PowerCompare, China’s mining operations consume around 6 TWh per year, accounting for 0.5% of the country’s total electricity usage.
Mati Greenspan, an analyst with trading platform eToro, said earlier this month: “The top six biggest mining pools from Antpool to BTCC are all largely based in China. Some rough estimates put China’s hashpower at more than 80% of the total network.”
But most of China’s electricity comes from CO2 emitting fossil fuels, leading to concerns about where the energy is coming from and the impacts burning it has. Greenspan stressed: “We need to be mindful of how that energy is created.”