Bitcoin mining now consuming the annual energy consumption of Ireland.
The Energy to Sustain Blockchain – The debate rages on as the energy consumption increases
Guest essay by Shea Karssing
Earlier this year, we published an article (https://ift.tt/2L7ypbE) on Bitcoin energy consumption, reporting how Iceland has become one of the top locations for cryptocurrency servers, which now exceed the consumption of private energy users.
Now, the criticism amongst ecological circles and the debates around Bitcoin energy consumption have been fueled by a paper by Alex de Vries of PwC’s Experience Center in Amsterdam.
His paper, Bitcoin’s Growing Energy Problem, concludes that Bitcoin’s energy consumption could soon be heading above a consumption rate of 8 gigawatts (GW) per year.
The paper’s findings:
- At the moment, the Bitcoin network consumes at least 2.55 GW of electricity – as high
as the annual energy consumption of Ireland.
- This could reach a consumption of 7.67 GW in the future – close to the energy
consumption of the entire nation of Austria (8.2 GW).
- By the end of 2018, the mining of bitcoin could be using as much as 0.005% of the
entire world’s energy use.
The reality is that Bitcoin uses a massive amount of energy. Author Alex de Vries says: “The bitcoin development community is experimenting with solutions such as the Lightning Network to improve the throughput of the network, which may alleviate the situation. For now, however, Bitcoin has a big problem and it is growing fast.”
Why does bitcoin mining require so much energy?
The bitcoin mining process uses computers with software that can solve complex mathematical problems. A new block is added to the blockchain every time a new problem is solved, rewarding the miner with bitcoins. This process requires a lot of energy because the computers need to ledger all the transactions so that the same coins aren’t spent twice – this
takes time and consumes a lot of electricity.
How can bitcoin mining become sustainable?
De Vries’ research reveals that if the price of bitcoin continues to go down, and the amount of energy needed to mine it continues to rise, bitcoin investment could become inefficient. One of the ways this can be avoided is if the world shifts to 100% renewable energy in the years ahead. With renewables, the environmental and efficiency concerns around bitcoin
energy usage would be negated.
New research from Renewable and Sustainable Energy Reviews journal found that a shift to total renewable energy using contemporary technology is both possible and affordable.Co-author of the research, Brian Vad Mathiesen of Aalborg University says: “There are some persistent myths that 100 percent renewable systems are not possible. Our contribution
deals with these myths one-by-one, using all the latest research. Now let’s get back to the business of modelling low-cost scenarios to eliminate fossil fuels from our energy system, so we can tackle the climate and health challenges they pose.”
If we were to eliminate fossil fuel usage, this would eliminate the environmental and efficiency challenges caused by energy-intensive bitcoin mining.
It’s not impossible to imagine a world in which bitcoin is used exclusively, backed by green energy. If there’s one thing we’ve learnt over time, it’s to ‘never say never’…
About the author:
Shea Karssing is a writer for Smarter Business, one of the UK’s leading independent consultancies, helping businesses secure the most comprehensive savings solutions from utilities contract management and procurement to business loans and facilities maintenance. Smarter Business are experts on all things energy, and it’s the company’s mission to provide
whole-of-market business comparisons, maximise savings and improve profitability for its clients. https://smarterbusiness.co.uk/
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