Bitcoin Mining Surges, Leading to Heavy Increases in Energy UseFebruary 8, 2021
As the price of bitcoin continues to surge this week, new arguments are emerging regarding the incredible amounts of energy bitcoin mining requires.
Bitcoin Mining Needs More Energy Than Ever
In the past, we have all read reports of bitcoin mining needing as much energy as what’s necessary to power Sin City (aka Las Vegas, Nevada). In addition, we have also heard that countries such as Iceland now use more energy for bitcoin mining that they do to power all their residences, but how much of all this is true?
According to a new report issued by the Bitcoin Energy Consumption Index, mining the asset now requires as much energy as what’s used to power countries such as Chile and New Zealand. As much as 77.78 terawatts per hour is what bitcoin mining requires throughout the globe.
Charles Hoskinson, the co-founder of Ethereum, was quick to ring in on the matter, claiming:
That’s an unfathomable amount of energy… The issue is it can never get better by design. The more successful bitcoin gets, the higher the price goes. The higher the price goes, the more competition for bitcoin, and thus, the more energy is expended to mine.
In fact, bitcoin mining now requires more energy than certain regions, such as the Netherlands. However, not everyone is convinced that we’re entering doomsday territory. One such person is Michel Rauchs, a research affiliate with the Cambridge Center for Alternative Finance. He explained in an interview that the amount of electricity needed to extract new coins is “enormously large,” though he also states that it’s still considerably smaller than many will admit.
Although we agree the amounts are ludicrous right now, that is still half as much as inactive home appliances in the U.S. consumed.
He states that the amount of energy used to power idle electronic devices in America – such as phone chargers and microwave ovens – could be enough to power the bitcoin network over the next two-year period. However, he did further say that bitcoin’s energy usage is likely to increase tenfold in the coming future, stating:
It doesn’t really matter whether there are new, more efficient machines on the market. You will just use more and more machines, but the total electricity consumption won’t go down based off that.
Things May Be a Bit Overhyped
Other figures – such as Meltem Demirors, chief strategy officer at Coin Shares – says that just because bitcoin mining requires so much energy doesn’t necessarily mean it’s going to present any additional hazards to the environment. She comments:
Energy use is not necessarily bad. Sending and storming emails uses energy. Yet, we don’t infer email to be bad because it consumers energy. What we have here is people trying to decide what is or is not a good use of energy, and bitcoin is incredibly transparent in its energy use while other industries are rather opaque.
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