Study Shows Bitcoin Mining Could Become An Energy Problem

A study published in the scientific journal Joule about bitcoin mining and its energy signature has found some disturbing facts regarding the sustainability of the bitcoin network for the next years. The academic paper written by Alex de Vries, a blockchain analyst, raises alarms about the growing energy quotas that are invested in mining.
The author, Alex de Vries, is a Senior Consultant and Blockchain Specialist in Price Water Coopers, in Amsterdam. He has researched extensively the bitcoin mining energy expenditure, and also created the “Bitcoin Energy Expenditure Index”, a measure that tries to aggregate the total energy invested in mining worldwide. He founded a website called Digiconomist, specialized in informing about this issue.
The study, titled “Bitcoin’s Growing Energy Problem”, tries to raise awareness of the sustainability of bitcoin mining by trying to estimate two difficult variables: the first, the amount of energy used by the bitcoin network today; and the second one, an estimate of how much will it take to run the network in the future, taking into account several factors.
The bitcoin network runs on mining. Mining is the process that lets transactions to be made on the blockchain. But this activity is process intensive and takes a lot of energy. The paper states that at the end of 2018, the bitcoin mining activity will use more than 0.5% of the world energy supply. That means that its energy requirements will be higher than the requirements of some small countries. But it also states that this figure could go as high as three times the estimated amount if the hash rate (the amount of mining processing power) in the network keeps rising. It also found that according to estimates, every bitcoin transaction consumes 80,000 times more than a credit card swipe. This shows that today, the bitcoin network is highly inefficient.
But some are not entirely convinced of these numbers. Marc Bevand, bitcoin entrepreneur told tech blog Gizmodo that Vries has omitted some considerations in his paper, the most important one being ignoring chip energy improvements over time. With a more refined process, the miners manufactured will use less power to achieve the same mining power. The whole paper can be read here.

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