The rate at which Bitcoin mining continues to consume huge gigawatts of power is becoming alarming, but there is really nothing to be afraid of, it is not as hapless as it seems.
Exponential Growth in Power Demand
When Bitcoin made its first transaction in 2008, it was incredibly easy to mine thousands of Bitcoins in a day, just sitting down with a good computer. The demands have increased astronomically over the years and alarmingly so, as the power demand for crypto mining continues to break grounds in electric capacity and computational power.
The famous case of an early Bitcoin developer who gave 10000 Bitcoins away for two delicious Pizzas has been riled and mocked on the internet by the new generation of cryptocurrency traders and enthusiasts, but the reality remains Bitcoin was astonishingly easy to mine then compared to present times. While you could mine thousands of Bitcoin (BTC) in a day in 2008, fast forward ten years later, and you wouldn’t even be able to mine a whole BTC coin if you kept running your giant Ant Miner 24/7 for a year. And with the increasing difficulty to mine, a Bitcoin comes the exponentially increasing demand for electric power.
Crunch Up the Numbers
A Bitcoin miner designed specifically to mine Bitcoin works by solving extremely complex math algorithms on the Bitcoin blockchain to mine BTC coins. The complexity and difficulty of the algorithms have increased over the decade; hence, the increase in the computational power required to solve them. The popular Antminer S9 for one, which has been designed to exclusively crunch Bitcoin math algorithms to lengthen the blockchain, consumes a load of more than 1.5 kilowatts—enough power to sufficiently supply two refrigerators and a flat-screen TV. If the Antminer S9 is allowed to run without interruption through a year, it would have comfortably consumed 15 kilowatts for every hour, with a reward of 0.85 Bitcoins at the end of the year.
The Numbers are not that Scary
The Bitcoin mining industry alone consumes more than 20,000-gigawatt hours (GWh) a year, a figure that is similar to the numbers posted by the whole country of Ireland. However, while there have been alarms about the possibility of the Bitcoin mining industry swallowing the global power distribution if the incentive is enough, it has been calculated that a miraculous increase of Bitcoin price rise to $50, 000 would still only put the power consumption of the mining industry at 350,000 GWh, barely 0.1% of the globe’s and dwarfed by the US consumption of 4.3 million GWh alone.
It is also important to note that technology would continue to evolve to be more energy-efficient. Recent reports that solar energy could reduce electricity cost by 75% percent while being environmentally friendly is one step in the right direction. Another is the gentle migration of the crypto industry from the complex proof-of-work to easy algorithms such as proof-of-stake, and mimblewimble are proofs that there isn’t much cause for alarm.