I’ve heard this story many times [for example, see here], but here is another version…
The University of Cambridge Centre for Alternative Finance (CCAF) apparently claims that Bitcoin probably has and energy consumption is somewhere between 40 and 445 annualised terawatt hours (TWh), with a central estimate of about 130 terawatt hours.
The UK’s electricity consumption is a little over 300 TWh a year, while Argentina and the Netherlands use about the same amount of energy as the CCAF’s best guess for Bitcoin.
as Bitcoin gets more valuable, the computing effort expended on creating and maintaining it – and therefore the energy consumed – inevitably increases.
We can track how much effort miners are making to create the currency.
They are currently reckoned to be making 160 quintillion calculations every second – that’s 160,000,000,000,000,000,000, in case you were wondering….
Alex de Vries, the founder of the Digiconomist website [says]
All the millions of trillions of calculations it takes to keep the system running aren’t really doing any useful work….”Right now we’re using a whole lot of energy to produce those calculations, but also the majority of that is sourced from fossil energy.”…
“We’d have to double our global energy production,” he says with a laugh. “For Bitcoin.”
He says it also limits the number of transactions the system can process to about five per second.
This doesn’t make for a useful currency, he argues.
Rowlatt How Bitcoin’s vast energy use could burst its bubble, BBC
Addenda
In a new research paper published in the journal Nature Communications, researchers from the Chinese Academy of Sciences and Tsinghua University have projected that on current trends, bitcoin mining electricity consumption will more than double from its current levels, peaking in 2024….
bitcoin [will] rank as the equivalent of the 12th largest electricity consumer amongst all countries, higher than the likes of major European economies, including Italy and Spain…. [and Australia].
It is estimated that around 70 per cent of bitcoin miners are located in China…. [and] is responsible for approximately 5.4 per cent of China’s electricity emissions…
[The paper’s authors state:] we find that the carbon emission pattern of Bitcoin blockchain will become a potential barrier against the emission reduction target of China.”
Mazengarb Bitcoin mining to consume more electricity than whole of Australia by 2024. RenewEconomy 7 April 2021
It is rather frustrating to think of how much renewable energy we will have to produce to power this thing on top of everything else we have to power. Bitcoin is a currency essentially based on massive amounts of electricity consumption, and hopes that people will pay real money or real products for more bitcoin.
Like all money its value is a matter of faith that other people will want it.
My only hope is that advertisements are going up on bus shelters saying “If you see bitcoin on a poster, it’s time to buy.” Anyone in finance knows that when you are trying to let the rubes into a secret it’s because those in the know are selling off….
Tags: Energy, technology
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