Backlash Over Bitcoin Electricity Consumption
As a recent article in Newsweek warns in its title, “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020.”
At its core, Bitcoin is a brand of cryptocurrency that, rather than being tied to a bank, is managed via an open ledger that is accessible to anyone with the knowledge of where and how to look. Those participants are identified only by a wallet ID number, not by name, and the system is unregulated and decentralized. A few businesses accept Bitcoins, but it’s the activities of Bitcoin miners that are so energy intensive.
Bitcoin miners compete for this brand of cryptocurrency by responding to challenging math problems. Instead of sitting down and solving the problems themselves, they use computers to solve a complex string of problems to mine a fixed number of Bitcoins. While that process collectively uses up a significant amount of electricity, miners aren’t likely to stop their activities. The New York Times estimates each Bitcoin to be currently worth $10,500. Value will fluctuate often, but the underlying truth is the same: There are sound financial reasons to want to mine these coins.
Each transaction needs to be confirmed on the blockchain online ledger, and as more and more computers join the cryptocurrency network, equations will exponentially become more complex, making the demand for power even greater.
Types of Cryptocurrency
When people think about cryptocurrency, they often think about Bitcoin. There are, in fact, more than a dozen other types of cryptocurrency. But because the biggest energy-consumption concerns today center on Bitcoin, that’s the focus of this post.
Bitcoin Electricity Usage
Currently, Newsweek says, the energy required to mine Bitcoin cryptocurrency is greater than the current consumption of energy of 159 individual countries. Digiconimist.net shares that Bitcoin electricity usage is already equal to all the power needed to run Denmark and that it is also enough to power more than three million households in the United States.
The Washington Post, meanwhile, discusses the potential impact if prices of cryptocurrency continue to rise, which would mean further increases in energy consumption. As one expert explains, the price of this currency represents “an economic incentive to add more mining equipment to the network…and that incentive is built in.”
Another quoted expert, David Malone from Maynooth University in Ireland, co-authored a 2014 paper titled Bitcoin Mining and its Energy Footprint. In the paper, the authors state that the Bitcoin network was using about as much electricity as his entire country. Since that time, “Bitcoin responds by making the problems more difficult.” (Watch our site for a blog post that will focus on Ireland and its specific bitcoin electricity-consumption challenges.)
How Much Electricity Does Bitcoin Use?
According to the Washington Post article, this network generates approximately 14 million trillion possible solutions (known as hashes) every single second. Malone estimates that if everyone uses the most efficient computing hardware available (which they do not!), the lowest amount of instantaneous power needed is 1.2 billion watts (gigawatts). That’s comparable to the electricity steadily generated by a nuclear reactor in the United States.
Fortune.com provides a comparative answer to put this power generation into context. Bitcoin mining now “guzzles more electricity than all the electric cars in the world.” And in 2018, energy demands for cryptocurrency are expected to triple.
Morgan Stanley estimated that this type of mining could use up 125-plus terawatt hours of electricity this year alone, while the 280,000 Tesla cars on the road at the end of 2017 used less than 1.3 terawatt hours of electricity for that entire year.
So producing bitcoins costs 29 times as much in energy than it takes to power all of the Tesla cars on the road today.
To quote one person’s comment on Tesla’s online discussion forums, “That’s freaking insane.”
CNN.com, meanwhile, provides another form of context to describe how much energy is needed to conduct a Bitcoin transaction. A subheading in an article reads, “Pay with Bitcoin or Power a Home?” It’s phrased this way because every single transaction that goes through the Bitcoin network uses enough electricity to power a typical home in the Netherlands.
Bitcoin Energy Usage in the Future
How this situation will play out is open to speculation, but what’s clear is that fast-track energy solutions are needed. In fact, Bitcoin miners and their energy needs are outpacing the ability of countries to build new power plants. It is much quicker to build a crypto mining operation than to permit and build new power plants, which typically takes 18 to 36 months. APR Energy plans to bridge this gap. We are a global leader in fast-track, flexible-power generation, and we create turnkey power plants to help run industries and cities around the globe. APR Energy provides reliable, cost-effective electricity when and where it’s needed, for as long as it’s needed—including but not limited to energy that’s needed because of the rapid growth of cryptocurrency.
If you’d like to discuss your own fast-track energy solutions, contact us online or call +1 (904) 223-2278 today.