The energy consumption of the Bitcoin network and how that affects the world around us is a massive topic of debate at the moment but getting a sense of how energy intensive Bitcoin mining and transactions are has been tough.
To assist folks with understanding how much energy Bitcoin consumes, Digiconomist has published a tracker which is terrifying to look at.
In terms of electrical energy usage, Digiconomist found that, for a single Bitcoin transaction, 1 721.96 kWh of power is needed. That’s enough electricity to power an average US house for 59 days.
It gets worse though, a single Bitcoin transaction has a carbon footprint equivalent to 1 812 813 VISA transactions or 136 321 hours spent watching YouTube if you prefer that metric.
Per year, the Bitcoin network is using as much electricity as Sweden does in a year.
There has been much talk about moving to renewable energy to power not only Bitcoin but other cryptocurrencies as well, but this is hardly a silver bullet.
As Digiconomist explains, once a mining rig is switched on, it doesn’t get switched off aside for maintenance and if the rig dies.
“Because of this, Bitcoin miners increase the baseload demand on a grid. They don’t just consume energy when there is an excess of renewables, but still require power during production shortages. In the latter case Bitcoin miners have historically ended up using fossil fuel based power (which is generally a more steady source of energy),” the organisation explains.
There’s also power producers to consider. If Bitcoin mining operations are increasing demand on a power grid, producers have to find ways to alleviate this demand and that likely means turning to fossil fuel and other, less environmentally friendly power production solutions.
Proof-of-stake rather than proof-of-work is a possible solution to the energy consumption.
“In proof-of-stake coin owners create blocks rather than miners, thus not requiring power hungry machines that produce as many hashes per second as possible. Because of this, the energy consumption of proof-of-stake is negligible compared to proof-of-work. Bitcoin could potentially switch to such an consensus algorithm, which would significantly improve environmental sustainability. It is estimated that a switch to proof-of-stake could save 99.95% of the energy currently required to run a proof-of-work based system,” Digiconomist writes.
Could this work? Well, it could but it would require buy-in from miners and the community and we suspect that players who have a large amount of skin in the game will push back on changes that affect their bottom line.
Whatever the solution is, it needs to be found fast because eventually more countries will follow China’s lead and ban Bitcoin mining altogether.
