The world’s most popular cryptocurrency, Bitcoin, may soon become a really effective way to send and receive money, however, it doesn’t operate for free. The process of Bitcoin mining takes huge quantities of electrical power, which causes a lot of speculation regarding the environmental friendliness of the crypto network.
How much energy does Bitcoin use?
According to the recent studies, presented to the US Senate Committee on Energy and Natural Resources in August 2018, Bitcoin mining accounts for almost 1% of the world’s overall electrical power consumption!
A Bitcoin specialist at PwC, Alex de Vries,
Moreover, this year bitcoin miners have consumed 5 times more energy than they did last year, and they are not going to slowdown. Miners around the world are solving a kind of an algorithmic puzzle with a very peculiar set of requirements. Every 10 minutes someone solves the puzzle and gets a reward. Currently, the reward is equal to 12.5 Bitcoins, which is worth of approximately $85,000.
More people, more power
The more people around the world that get interested in mining Bitcoins, the more power-hungry computers are used to mine them. The number of people, who joined the Bitcoin network doesn’t influence the speed and the quantity of Bitcoins mined. The puzzle still takes 10 minutes to solve. However, the number of people involved in the mining competition outnumbers the computing power, and therefore, energy consumed to produce each coin.
Figures don’t lie
So, how exactly can we estimate the energy, used to power the Bitcoin network? One method is to find out how many sums are generated every second in order to solve Bitcoin’s algorithmic puzzle. From this, we can find out how much energy it takes to make each sum, which is called a hash.
The total number of hashes can be quite frightening. Can you just imagine that in 2018, Bitcoin’s computer network has produced 342,934,450 billion hashes (gigahashes) per second!
Besides, this estimate is rather optimistic, because many types of mining equipment require much more energy than ASIC. Plus, we don’t count the electricity, needed for cooling the powerful mining equipment.
In general, the problem of Bitcoin’s energy consumption and its evaluation is that it is constantly changing. The hash rate, i.e. the computing power spent to produce coins, has significantly increased and fluctuates according to the Bitcoin price changes.
In line with massive power consumption, Bitcoin has another “environmental” problem. The network is mostly driven by Chinese coal-fired power plants, which provide electricity at very low rates. This results in a huge carbon footprint for every single transaction on the Bitcoin network.
However, the good thing is, the quantity of energy consumption is directly proportional to the . If it falls, we will be able to return to our usual sources of environmental concern, such as the automotive industry and air pollution.
Bitcoin blockchain vs. the world we live in
Will the enormous amount of energy, consumed by the Bitcoin network, soon become rival to the rest of the world’s normal economy? The answer? Probably not yet.
While blockchain specialists work hard to improve the energy-efficiency of mining with clever solutions, such as: efficient miners, PoS, cheap and renewable energy usage, new code such as Lightning Network and future blockchain applications (dApps). Global leaders in the energy resources sector, such as Suez corporation, are ready to address these new challenges and offer innovative solutions to enter the age of the resource revolution.
The company, with a history of 160 years, solves 4 major challenges: it develops access to resources, protects them, optimises resource usage and produces new sustainable ones. Suez’s solutions help to improve environmental performance around the globe. And they are not alone in their initiative.
Join the resource revolution
Even if your everyday life seems far from the question of Bitcoin energy consumption and various initiatives to ameliorate the world’s environmental performance, you can still become a little bit closer.
If you are a trader, follow thetogether with other leaders in the energy resources sector and trade CFDs on their shares.
Important: If you trade CFDs on shares or cryptocurrencies, including Bitcoin, please, bear in mind that many retail investors lose money when trading. You should consider whether you can afford to take the risk.