Bitcoin Energy Use to Equal Austria by 2019
Experts predict that by the end of 2018 energy-hungry Bitcoin mining will use as much electricity as Austria.
At the end of last year, experts estimated that the Bitcoin network used more power than the whole of the Republic of Ireland, which uses 3.1 gigawatts (GW). It is now on track to use 7.67 GW of power by the end of 2018, this is equal to one two-hundredth of all the electricity used on the planet. To put it in perspective, it is roughly equal to one million transatlantic flights or 20 megatonnes of CO² emissions.
High Rate of Energy Waste
Despite the high cost of owning and operating a Bitcoin mining rig, the rate of mining has increased significantly. Mining requires a hefty amount of power and roughly 80% of a Bitcoin miner’s expenses are spent on electricity.
Miners all compete to complete the right number of hashes, which drives them to buy more computing power and run their rigs longer to earn more rewards. It is a winner takes it all scenario for miners, therefore, the energy used by the losers is a massive waste of power. Even a successful miner will throw out 99% of their work, which means the electricity that could have been used elsewhere was essentially squandered pointlessly.
However, the latest generation of computers are able to do roughly 20% more calculations per MWh (Million Watt Hours) of electricity, which in theory should lower the energy rate of consumption. But commentators argue that in practice it means miners are can afford to run more machines at once, leaving their power usage roughly the same.
Increase in Value Equals an Increase in Energy Use
It is the intensive amount of energy required to mine that is causing concern among environmentalists as, if this upward trend continues, it could have serious implications for the environment. Even if miners opt to use renewable energy this does not mitigate their carbon footprint as they divert clean energy away from other areas that could be using it. So, while it reduces the miner’s expenses it does not shrink their impact.
Credit Suisse estimates that if the value of Bitcoin increases five times its current value then accordingly electricity consumption would increase tenfold. However, if the value of Bitcoin falls this would decrease the amount of energy used as it would not be as profitable.
Cheap Energy Cities Respond
Recently, the city of Plattsburgh NY became the first US decided to adopt a local law to ban cryptocurrency mining for the next 18 months. The reason for this move was that the city had rapidly exceeded its monthly electricity allotment and as a result, the residents of the city saw their power bills soar.
Plattsburgh offers the cheapest electricity in the world due to its proximity to the hydroelectric dam, so naturally, miners flocked to the town. The town’s largest mining facility used 10% of the city’s power in January and February.
Earlier this year, in a leaked Chinese government memo it was outlined that city officials should encourage cryptocurrency miners to make a sharp-exit from the country due to the environmental damage caused by the process. It also cited the massive energy drain caused by mining, saying that it was pulling energy away from less developed provincial areas that desperately needed it.
As the future of cryptocurrency remains unclear so too does the environmental impact. If it is to be the money of the future then currencies will have to come up with a less energy intensive way for people to mine it.