A recent report indicated that one transaction involving the largest cryptocurrency uses the same amount of electricity as a British household for nearly two months.
Essentially, Bitcoin mining is the process of creating new coins and confirming initiated transactions. It’s executed by “miners,” who are solving complicated equations. On average, every 10 minutes, a new block is added to the giant distributed public ledger of already existing transactions, and miners receive the reward (fee) for their job.
According to the report, provided by the multinational professional service network of companies, PWC, there are roughly four million computer rigs worldwide used by Bitcoin miners.
However, Alex de Vries, a blockchain specialist at PWC, claimed that 98% of them would never achieve their mission. He also noted that those computer rigs have a relatively short period of existence and they cannot be reused after that:
“The shocking thing is the average lifetime of a Bitcoin mining machine is one and a half years because we have a new generation of machines which are better at doing these calculations.” According to De Vries.
“That means it’s impossible for 98 percent of the devices during their lifetime to make the calculation that actually results in a reward. So the rest are just running pointlessly for a few years, using up energy, and producing heat, and then they will just get trashed because they can’t be repurposed. It’s insane.”
As a result, PWC specialists have concluded that each Bitcoin transaction uses around 657.39 kWh of electricity. To put things into perspective, this is the equivalent of 59 days of power for an average British household.
De Vries also informed about the carbon footprint left after a single transaction. It’s the same as watching over 52,000 hours of YouTube or making over 780,000 Visa transactions.
The numbers are even more impressive when examined annually. Bitcoin’s highest yearly electricity usage is 77.78 terawatt hours, according to the report. This equals to the entire electrical consumption of Chile.
Somewhat expectedly, the highest number of Bitcoin transactions was during the 2017/2018 parabolic price increase. After the severe decline, which brought the price down to $3,120 (Bitstamp, December 2018), consumption also crashed, but it’s soaring lately again, the report indicated.
PWC’s paper mentioned that there’s one legitimate solution to the issue. Bitcoin mining should be operated using renewable energy.
The industry might already be one step ahead, according to a 2019 extensive report on the matter compiled by the popular cryptocurrency research firm, CoinShares. It stated that 74.1% of all Bitcoin mining companies are already utilizing renewable energy.
In fact, the document concluded that Bitcoin mining is “more renewables-driven than almost every other large-scale industry in the world.”
This article was first published on: Mar 7, 2020