bookmark_borderElectricity consumption of Bitcoin: a market-based and technical analysis

Bitcoin miners around the world, according to a recent study of BlockchainAnalytics, consume more electrical energy than Nigeria and New Zealand. And now it is equivalent to the consumption of electrical energy in Czechoslovakia.

BlockchainAnalytics mentions that the electrical energy in the Bitcoin mining process continues to increase. In 2017 it consumed more electricity than in Jamaica. In 2018 more than Nigeria. Then, in 2019 more than New Zealand.

“Currently, the electricity used by Bitcoin mining globally is equivalent to electricity consumption in Czechoslovakia,” said BlockchainAnalytics in a statement yesterday, Tuesday (February 11, 2020). Make sure you use best electric wire to mine bitcoins without any interruption.

Currently, Bitcoin mine’s annual electricity consumption is 56 TWh. For example, Portugal consumes 49 TWh per year, Romania (50 TWh), and the Czechoslovak Republic (59 TWh). It is estimated that Bitcoin mining will consume more than 70 TWh by 2020.

“That’s the equivalent of Chile, a country with a population of 18 million,” explained BlockchainAnalytics. As the number one crypto asset globally, Bitcoin is getting more popular and more expensive every year. According to BlockchainAnalytics, that’s what is driving more people and companies into the Bitcoin mining business.

“To validate block Bitcoin transactions to be rewarded with new Bitcoins, miners compete with each other. Using inexpensive, specialized hardware, miners with more computing power (hash rate) have a greater chance of winning the competition. It encourages the miners to buy more powerful equipment that consumes more electricity,” he explained.

Simultaneously, the efficiency of mining equipment continues to increase, and over time less electricity is required to produce the same hash rate. This factor makes it possible to slow down the increase in electricity consumption.

“For example, in 2016, Bitmain, the world’s largest mining equipment manufacturer, launched the legendary Antminer S9, which consumes 100 watts to produce one terahash per second (100 W / TH per second).

The generation after that, namely the Antminer S15 (2018), consumes 57 W / TH per second. Currently, the most efficient Antminer S17 finishes only 40 W / TH per second,” explained BlockchainAnalytics.

That situation, says BlockchainAnalytics, will force several Bitcoin mining equipment manufacturers to compete in developing more efficient hardware without sacrificing hash rate.

On the other hand, it also encourages more Bitcoin miners, assuming that electricity costs remain cheap. That will be able to push the hash rate even higher.

When compared with electricity usage as a whole in the world, bitcoin’s electricity consumption reaches 0.25% of global electricity consumption. Or the equivalent of the consumption of a water heater that is used for 11 consecutive years.

This consumption looks big? Wait a minute. Compared with the consumption of electronic devices that are inactive but continually burning in the US, bitcoin electricity consumption is only a quarter of it.

“The narrative we want to make is that this tool is made as a comparison. Visitors to this site can decide for themselves whether (consumption) is large or small,” said Michel Rauchs, one of the CBECI makers, as quoted from The Verge, Friday (5/7 / 2019).

But keep in mind, the figures released by CBECI are not precisely accurate, given the high range, from 22 TWh to 150 TWh.

The Cambridge Center for Alternative Finance, which oversees CBECI’s work, said that CBECI estimates often produce very different numbers from one model to another.

But as a comparison, there is also an estimate of electricity consumption by bitcoin released by Digiconomist, which estimates its electricity consumption to reach 70 TWh, or 6 TWh greater than CBECI.

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