Wednesday, December 6, 2017

Timothy B. Lee — Bitcoin’s insane energy consumption, explained

The skyrocketing value of Bitcoin is leading to soaring energy consumption. According to one widely cited website that tracks the subject, the Bitcoin network is consuming power at an annual rate of 32TWh—about as much as Denmark. By the site's calculations, each Bitcoin transaction consumes 250kWh, enough to power homes for nine days.
Naturally, this is leading to concerns about sustainability. Eric Holthaus, a writer for Grist, projectsthat, at current growth rates, the Bitcoin network will "use as much electricity as the entire world does today" by early 2020. "This is an unsustainable trajectory," he writes.
Global energy production obviously can't double in two years, and it would be an environmental disaster if it did. Fortunately, while the Bitcoin network consumes a ridiculous amount of energy, particularly on a per-transaction basis, the situation isn't as dire as critics like Holthaus claim.
Bitcoin's energy consumption won't necessarily march steadily upward. Indeed, Bitcoin's energy consumption is designed to fall in the long run. And Bitcoin's energy consumption isn't tied to the number of transactions the network handles. That means that increasing use of the network won't necessarily impose a high environmental cost....
Ars Technica
Bitcoin’s insane energy consumption, explained
Timothy B. Lee, senior reporter covering tech policy, blockchain technologies and the future of transportation

See also

If you want the details.
The heart of Bitcoin is now in Inner Mongolia, where dirty coal fuels sophisticated semiconductor engineering...
IEEE Specturm
Why the Biggest Bitcoin Mines Are in China
Morgen E. Peck

9 comments:

André said...

I am pretty sure that the traditional virtual currency (bank reserves) does not consume 0,1% of that amount of energy...

Ralph Musgrave said...

Andre, You're way out. It's more like 0.000000000001%. Creating base money (aka reserves) simply requires someone at the central bank to press a few buttons on a computer keyboard.

When the UK finance minister at the height of the crisis (Alistair Darling) wanted £60bn to rescue two banks, he rang up the governor of the Bank of England and asked him to press relevant buttons on his keyboard, and the governor obliged, out of the kindness of his heart.



Tyler Healey said...

The proletariat figures out a way to relatively quickly achieve financial security and is promptly told they're destroyers of the environment.

Matt Franko said...

“The heart of Bitcoin is now in Inner Mongolia, ”

Shocking....

Tom Hickey said...

Long known. Cheap power.

Unknown said...

Bitcoin was designed to be limited as to the number of bitcoins possible. You are coming to that limit. From now on, the price of the bitcoin will be determined by those who own bitcoins, and those who need them for their transactions.

André said...

Yeah, probably it was lower than 0,1%.

But the Central Bank still operates at least two big data centers: the main one and the contingency one. It is costly to operate them, and it is not just the energy cost. But of course, those costs combined are certainly lower than 0,1% of bitcoin's energy cost. I can't tell if it is 0,000000000001% though...

André said...

Is bitcoin financial security? It is an extremely volatile explosive bubble. And a energy costly one.

Tyler Healey said...

Bitcoin's price has skyrocketed over the past two years. Maybe it's a bubble. Maybe not.