Bitcoin’s energy issues are exploding
Every day is a new record for the skyrocketing cryptocurrency – and not just for its value.
The outrageous wealth that bitcoin is generating for early adopters is also consuming an outrageous amount of resources across the world. Because bitcoin rewards those who use their own computing power to make the calculations that run the global bitcoin network, and because of a bitcoin function that ratchets up the difficulty of creating new bitcoins as the overall computing power on the network escalates, the energy needed to run all those computers is rising just as fast.
That computer power is measured in hashes per second, and blockchain.info stats show that the bitcoin network has exploded from just over 2 million terahashes per second at the beginning of the year to a number quickly approaching 15 million today.
Translating that into actual energy usage, Digiconomist’s Bitcoin Energy Consumption Index estimates this power is pulling about 32 TWh per year from the electric grid, which is roughly as much as the entire country of Serbia consumes annually and around 0.8% of what the US uses in a year. In November alone, the total network power consumption increased by almost 31% to 3.17 GW.
That’s a staggering amount of energy, but at the current pace of growth, energy use would nearly double every quarter – to 14.5% of US energy usage by the end of 2018 and 202% of US energy consumption at the end of 2019.
It’s hard to image that kind of energy use being even remotely sustainable.
In dollar terms, bitcoin’s energy costs are up to $12.80 per transaction assuming $0.05 per kWh, which is an increase of one-fourth (26%) since last month. Year-to-date average energy costs have grown 164%.
Yet bitcoin is only just beginning to gain traction globally; the CBOE launched its first bitcoin futures this week and some renters will soon be able to make payments in bitcoin.