The Curious Energy Issue Facing Cryptocurrencies
- Nov 30, 2017 1:52 am GMT
Large swathes of the population aren’t quite sure what it is. Some, like world renowned Columbia University professor Joseph Stiglitz have called for a swift ban on the practice. Yet others have made real money though the speculation bubble could flatten out or even burst. The topic is Bitcoin and there seems to be as much fanfare as there is bewilderment surrounding the digital currency of the next century. But even more stunning, particularly to those that live and breathe energy and renewables, is the amount of power that is consumed in the mining of bitcoins and other cryptocurrencies.
As background, cryptocurrencies operate through the block chain system and provide a highly secure method for various transactions including financial transactions. Cryptocurrency “miners” work to uncover or mine new bitcoins by solving complicated transactions and adding the to the public ledger (block chain). Popular cryptocurrencies include Bitcoin, Ethereum and Litecoin. The energy aspect of all of this is the energy consumed by servers and computer to mine more coins is staggering . With Bitcoin specifically surging past $11,000 just recently, and Ethereum gaining a whopping 5,700% in 2017, the demand for more mining and more energy efficient mining technology continues to build. According to Digiconomist’s Bitcoin Consumption Index, the current annual electricity consumption is over 30TWh. As the block becomes harder to mine, larger amounts of energy are needed to execute the calculations. According to Digiconomist, “If Bitcoin miners were their own country, they would rank 61st in the world for electricity consumption,” this would put them above the entire power consumption of Ireland and Nigeria.
Time will tell how the cryptocurrency mining energy challenge will be mitigated. In the meantime, the free for all continues with new mining startups joining the fray and more people investing into what either could be the biggest bubble or a potentially massive windfall of our digital age.
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