Energy & Bitcoin – Curiosities on how it works

Every once in a while, Bitcoin and crypto surge their way back into the headlines of mainstream media outlets, usually because of their meteoric trendlines, massive price swings, and regulatory conundrums.  While its usage is far from mainstream (in spite of Elon Musk’s best efforts), public interest continues to grow, and each day the cryptocurrency world is becoming more and more accessible for curious people wanting to get into the game.

Rather than posting another article on how bitcoin works, we thought it was a good time to highlight some interesting data around Bitcoin’s energy consumption as it grows exponentially across the globe.

• Major cryptocurrencies like Bitcoin and Ethereum are reportedly energy-intensive technologies.
• Around 66% of the world’s bitcoin mining now happens in China.
• In Dalian — China’s bitcoin mining capital — one factory alone mines 750 bitcoin per month or $35.6m in value at the current market rate. To do so, it utilizes 3k+ ASIC machines and spends $1m+ per month on electricity.
• Power makes up the vast majority of the overhead.
• The key for many mine operators is to plunk down where electricity costs are especially cheap — places like Iceland, upstate New York, small towns in Washington State, and rural Texas.
• Collectively, bitcoin miners use 121.4 terawatt-hours (TWh) of electricity per year to sustain their operations.
• To give that number some additional context, that’s enough to power the entire population of Argentina (45m) for an entire year.
• Eventually, the power used by miners will be a moot point as roughly 18.6m (88.5%) of the possible 21m bitcoins have already been mined. At the current rate, the final bitcoin is projected to be mined in the year 2140.
• There is a growing preoccupation that Bitcoin’s energy consumption is so inefficient that more efficient mining hardware won’t help.

SOURCES: BBC, The Hustle, University of Michigan