With Bitcoin topping milestone after milestone so frequently these days, it’s rather easy to dismiss the other metrics where the top digital currency is also setting new highs. One of these “metrics” is the consumption of energy. According to a British energy price comparison service, the cost for mining these digital coins may be higher than most people realize.
The process of “mining” is done by processing units that need to solve and check complex algorithms, and “miners” are the people who use computer systems that do this work. This is all done so Bitcoin can stay immutable and secure. In the early days of the digital currency, mining was only done by a small quantity of laptop computers worldwide. And as Bitcoin’s price picked up, so too did the profitability of doing the computational duties needed to make sure the network runs without interference. This started at an arms race, where chip designers made “proof of work” with considerably more complex machinery, generating a bigger percentage of the rewards of the miners that motivate participants of the network. What’s more, these special units also use a huge amount of electricity.
Fast forward a few years and we see a greater influx of miners that compete for the network’s rewards along with the price of mining equipment going up. As of press time, miners earn around 12.5BTC (around $100,625) when their equipment solves the algorithm first. This then led to an increase in electricity consumption.
A UK-based energy price evaluation platform by the name of Power Compare recently published the amount of electricity needed by the Bitcoin network. As of Monday, 20th of November, 2017, around 0.13% of the total global electricity is being consumed by the Bitcoin network. This, in turn, led to people speculating that the Bitcoin network is less efficient than 159 countries around the world in terms of energy use.
Power Compare also released other statistics concerned with Bitcoin’s power consumption. One of these is the company estimating that the amount of power the Bitcoin network uses is equal to the usage of 6.1 million Britons, or 2.4 Americans. All this power costs around $1.5 billion every year. However, it’s still easy to see why people are competing to get their own share of the digital currency, as mining is estimated to earn over $7.2 billion in the same amount of time.