A recent article in Grist by Eric Holthaus argues that bitcoin is slowing the effort to achieve a rapid transition from fossil fuels. The argument seems to be that bitcoin miners are using power that could be used to charge electric vehicles EVs. However, this is impossible since there is not the demand for this power to charge EVs.
There is no shortage of power to charge EV’s caused by bitcoin power usage. Nor is there any evidence presented that power used in bitcoin mining is creating a shortage for other users. In Venezuela rogue operations taking advantage of subsidized electricity are claimed to have created blackouts but this is surely an exception. Nevertheless bitcoin mining’s power usage is troubling.
Bitcoin mining is using huge amounts of power
As time goes by the computing power required to solve the mathematical problems that allow a block to be added to the block chain become more complicated and require more computer power which in turn requires more electrical power. Early on ordinary computers could be used for mining but now such mining actually costs more than it is worth.
Mining is done using specialized equipment often in large numbers as shown on the appended video.
How much energy does mining bitcoin use?
The Grist article claims that each bitcoin transaction takes the same amount of energy that is used to power nine homes in the US for one day.
Grist also claims that the aggregate power of the bitcoin network is nearly 100,000 times larger than the world’s 500 fastest supercomputers combined. The article’s own links shows that this statement is rife with difficulties.
According to Grist the bitcoin miner network is increasing its energy use every day by 450 gigawatt hours, about the same amount that Haiti uses in a year. Grist claims that by July 2019 the bitcoin network will require more electricity than the entire US. and by February 2020 it will use as much electricity as the entire world. No links are provided as to where this data originated.
Another article by a UK organization Power Compare has charts and maps comparing the energy consumption used in mining bitcoin to the power consumption of various countries. Compared to the use of power by the US and China bitcoin miners use less than one percent of their consumption. However, bitcoin mining uses more energy than Ireland or Nigeria as well as many other countries. In all bitcoin miners use more energy than 159 countries but many of them are small.
Is the data on bitcoin energy consumption accurate?
I am no expert on these questions. However, several references are made by different articles to Digiconomist articles about bitcoin energy consumption including the Grist article and the Power Compare article.
At least one critic finds Digiconomist estimates much too high. There is an extended critique here. The critic argues that the estimates inflate the energy use by bitcoin mining considerably: “The author of the Bitcoin Energy Consumption Index makes fundamentally flawed assumptions, causing it to demonstrably overestimate the electricity consumption of Bitcoin miners by 1.5× to 3.6×, and likely by 2.0× to 2.5.”
Even if the data on bitcoin energy consumption is somewhat inflated it is still large enough to be of concern and is likely to get worse as time goes on.
One factor that may help limit the increasing energy consumption is that if the price of bitcoin should drop drastically mining might become a losing proposition. It is not now as at $0.12 the average cost of electricity in the US, it costs $1,567.88 to mine one bitcoin, and at a lower cost of $0.04 available in some locations the price is just $522.62. Both are well below the present price of over $11,000 per coin. However, that could change.
Another factor is that there are a limited number of coins to be mined. A year from now 80 percent of all bitcoins will have been mined. It will become more and more expensive to mine them as difficulty of math problems increase. If the price of bitcoin does not keep pace with the cost then mining will become unprofitable.
By 2040 all bitcoins will have been mined so then the problem will be solved.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com