ScienceDirect has published a new study by economist Alex de Vries finding that the Bitcoin network’s electricity consumption could rise to 0.5 percent of global energy use by the end of 2018.
The study, titled “The growing energy problem of Bitcoin,” concludes that the Bitcoin network currently consumes roughly 2.55 GW of power and could reach 7.67 GW in the future, making its demand comparable to countries such as Ireland (3.1 GW) and Austria (8.2 GW).
How BTC Mining Works
When a node finds a valid hash, it broadcasts the block it was working on to the rest of the network. Other nodes signal acceptance by starting to build the next block of the blockchain using the accepted block’s hash. The miner who produced the accepted block currently receives a block reward of 12.5 BTC.
The greater a miner’s share of the network’s total computational power, the larger their share of the distributed rewards. To maintain an average block time of about 10 minutes, the network continuously adjusts mining difficulty. Satoshi Nakamoto, the presumed creator of Bitcoin, compared creating new coins to gold mining — except Bitcoin mining consumes computational power and electricity instead of physical labor.
Figures from the Study
Mining’s electricity consumption has become a frequent and controversial topic due to the substantial increase in recent years. For example, reports in mid-February suggested that cryptocurrency mining in Iceland might consume more energy in 2018 than the country’s households.
To quantify actual electricity consumption, Alex de Vries outlines several methods used to estimate current and future energy use of the Bitcoin network and notes (translated):
measuring the electricity consumption of Bitcoin mining machines remains a challenge to this day.
De Vries uses Bitmain’s Antminer models as his primary example to illustrate how much energy each device consumes over its operational lifetime.
The following table shows estimated lifetime costs for an Antminer S9 under different lifespans and an assumed production cost of US $500 (assuming electricity costs of $0.05 per kWh):
| Machine | Expected Lifetime (Years) | Estimated Production Costs (US$) | Lifetime Electricity Use (kWh) | Lifetime Electricity Costs (US$) | Total Lifetime Costs (US$) | Electricity Costs/Total Costs (%) |
|---|---|---|---|---|---|---|
| Antminer S9 | 2 | 500 | 24,037 | 1,202 | 1,702 | 70.6 |
| Antminer S9 | 1.5 | 500 | 18,028 | 901 | 1,401 | 64.3 |
| Antminer S9 | 1 | 500 | 12,019 | 601 | 1,101 | 54.6 |
Source: ScienceDirect study by Alex de Vries
With the Bitcoin network processing roughly 200,000 transactions per day, de Vries estimates the average electricity consumption per transaction at a minimum of about 300 kWh, with the potential to exceed 900 kWh soon.
In mid-March 2018 the network reportedly performed roughly 26 trillion hashing operations per second while processing only 2–3 transactions per second. That implies a ratio of hashing operations to processed transactions of about 8.7 trillion at best.
De Vries also points out that a hashrate of 14 terahashes per second could come from a single Antminer S9 consuming 1,372 W or from more than half a million PlayStation 3 consoles consuming about 40 MW in total. A single PlayStation 3 achieves roughly 21 megahashes per second with a power draw around 60 W.
It is not possible, according to de Vries, to determine the precise number of devices connected to the network. Current estimates suggest the Bitcoin network has around 10,000 nodes, and each node can represent one or multiple mining machines.
Despite the rising electricity demand, de Vries notes reasons for cautious optimism: scaling solutions such as the Lightning Network could substantially reduce energy consumption by moving many transactions off-chain and settling fewer operations on the main Bitcoin blockchain.
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