Honestly, nobody knows the exact amount of energy bitcoin mining
Honestly, nobody knows the exact amount of energy bitcoin mining consumes globally, because crypto miners are secretive about their trade.
However, everyone agrees that the electricity consumption of cryptocurrency mining may be very large. A study conducted by Alex de Vries argues that bitcoin mining consumes about as much electricity as all of Ireland, annually.
However, it contends that the energy consumption is doubling every six months and may reach the annual consumption of the Czech Republic which is about 27 Twh.
That may be an eye-popping figure, but it’s really worth to be worried about.
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Not All, But Most of It is Powered by Coal
One of the major concerns over Bitcoin‘s electricity consumption was that nearly all of it was sourced at China’s polluting coal power plants.
It is likely true that a lot of it comes from coal power plants, but the Chinese government has taken steps to cut pollution in the past year, asking local utilities not to give low-cost deals to crypto miners on electricity.
Now, there’s plenty of clean energy available.
Distributed Consumption
Comparing the electricity consumption of bitcoin with that of the Czech Republic might be useful for perspective, but it’s not as though all the miners are sitting in Prague, and doubling the country’s electricity use and putting pressure on its infrastructure.
Well, Bitcoin mining can be done anywhere, and since electricity bills make up for 60% of the cost of mining a single coin, as indicated by Alex de Vries, miners are flocking to places which offer the lowest-priced electricity with favourable climates.
According to a 2015 study –
“Even though bitcoin mining may consume 0.3% of all electricity globally, in absolute terms (67 TWh) it is the same amount of energy consumed by electronic devices in the “off” or standby state (64 TWh) in the US alone.”
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Is Bitcoin Adding Value to Society?
There are a few environmentalists who argue that bitcoin is a speculative digital asset, which means it is a product of late capitalism consuming tons of electricity but adding no real value to the society.
However, economists don’t entirely disagree. As Shipman says –
“Economists regard bubbles as inevitable especially when there are exciting new technologies coming along. They still regard them as regrettable because there is a misallocation of resources as long as the bubble lasts. And, ever since cryptocurrencies were born, many economists have seen them as bubbly.”
Some economists still believe that Bitcoin and its ilk could have promised down the road. For instance, in nations with unstable currencies, Bitcoin could give citizens an option at the point their governments pursue their policies debasing the local currency.
Beyond the tangible value of the digital coins, the underlying blockchain technology certainly has added value to society. It has given individuals the means of conducting transactions transparently and in a manner which is trustworthy without having a centralized body, like a Government, regulating all aspects of the transaction.
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When Exactly Should You Be Worried?
Shipman Says –
“The only case for worrying would be if there’s something wrong with bitcoin other than the power it is using. This could be because it’s being used for criminal activities or tax avoidance.”
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