The amount of energy expended mining bitcoin globally has exceeded the amount used on average by Ireland and most African nations, according to latest data from Power Compare.
Bitcoin’s ongoing meteoric price (now aiming for $20,000 – dec. update 2017) rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst. However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase.
That is the surge in global electricity consumption used to “mine” more Bitcoins. According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday, November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh. That’s the equivalent of 0.13% of total global electricity consumption.
Bitcoin mining is now using more electricity than 159 individual countries. More than Ireland or Nigeria.
If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption.
Bitcoin is a cryptocurrency that was created in 2009. It is designed to not be controlled by any one party and is underpinned by a system called blockchain, which records transactions. To ensure transactions are not falsified or records of ownership changed, participants of the bitcoin network must sign off on transactions in “blocks” (hence, blockchain).
To incentivize people to do this work, which involves computers completing complex cryptographic problems, people who verify blocks are rewarded with freshly created bitcoin. Hence, this process is known as bitcoin “mining.”
Here are a few other interesting facts about Bitcoin mining and electricity consumption:
- In the past month alone, Bitcoin mining electricity consumption is estimated to have increased by 29.98%
- If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.
- Estimated annualized global mining revenues: $7.2 billion USD (£5.4 billion)
- Estimated global mining costs: $1.5 billion USD (£1.1 billion)
- Number of Americans who could be powered by bitcoin mining: 2.4 million (more than the population of Houston)
- Number of Britons who could be powered by bitcoin mining: 6.1 million (more than the population of Birmingham, Leeds, Sheffield, Manchester, Bradford, Liverpool, Bristol, Croydon, Coventry, Leicester & Nottingham combined) Or Scotland, Wales or Northern Ireland.
- Bitcoin Mining consumes more electricity than 12 US states (Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming)
Bitcoin Mining Electricity Consumption Vs Countries
The map below shows how much more or less bitcoin mining energy consumption compares to each countries energy usage with 100% being equal.
Ireland currently consumes an estimated 25 TWh of electricity per year, so global Bitcoin mining consumption is 116%, or 16% more than they consume. The UK consumes an estimated 309 TWh of electricity per year so global Bitcoin mining consumption is only equivalent to 9.4% of the UK total.
The map below shows which countries in Europe consume more or less electricity than Bitcoin mining:
Balkan countries consume less than the electricity consumed for by global Bitcoin mining!
Looking at the map, one can see the growing trend and energy consumption in all of the Balkans, including Kosovo, Albania, Macedonia, Serbia, Croatia, etc.
According to the table by powercompare.co.uk, bitcoin mining consumption relative to country’s use, is over 1000% in Kosovo, over 400% in Macedonia, over 100% in Serbia, etc.
Bitcoin Mining is currently consuming 0.13% of the world’s electricity output, it’s growing incredibly quickly.
Electricity consumption data mostly comes from the CIA via Wikipedia and is mostly for 2014, since that’s the most recent year available. Unlike some other sources it includes, residential, commercial and industrial use, so may be higher than other figures quoted elsewhere.
The Bitcoin Energy Consumption Index estimates consumption has increased by 29.98% over the past month. If that growth rate were to continue, and countries did not add any new power generating capacity, Bitcoin mining would:
- Be greater than UK electricity consumption by October 2018 (309 TWh)
- Be greater than US electricity consumption by July 2019 (3,913 TWh)
- Consume all the world’s electricity by February 2020. (21,776 TWh)
The Cost of Mining Bitcoins
The Bitcoin Energy Consumption Index estimates that the total annual cost of mining Bitcoins stands at $1.5 billion (£1.1 billion).
On the other hand, to put the energy consumed by the Bitcoin network into perspective we can compare it to another payment system like VISA for example. Even though the available information on VISA’s energy consumption is limited, we can establish that the data centers that process VISA’s transactions consume energy equal to that of 50,000 U.S. households. We also know VISA processed 82.3 billion transactions in 2016. With the help of these numbers, it is possible to compare both networks and show that Bitcoin is extremely more energy intensive per transaction than VISA.