The power consumption of the Bitcoin network has exceeded the power consumption of Belarus

Mining-farm of Internet ombudsman Dmitry Marinichev at the Moskvich automobile plant in the Russian capital. Photo: Maxim Zmeyev / AFP / Getty Images

According to Digiconomist statistics , over the last month, the power consumption of the Bitcoin network increased by 25% and reached 35.77 TWh in terms of annualized numbers. This is more than the annual energy consumption of Denmark (33 TWh), Belarus (33.8 TWh) or Bulgaria (34.9 TWh).

At the moment, Bitcoin accounts for 0.16% of the electricity consumed in the world . And this is not the limit. Some experts believe that if growth continues at the same pace, it will greatly affect the global energy system.

Here are some key characteristics of the Digiconomist Bitcoin Energy Consumption Index on the current consumption of electricity on the Bitcoin network.

Current Bitcoin Energy Rating (TWH)35.77
Annualized global mining revenues$ 17,833,323,489
Annualized global mining costs$ 1 788 353 933
Country nearest to Bitcoin for energy consumptionBulgaria
Estimated electricity consumption for the previous day (kWh)97 991 996
Estimated watt consumption per Ghash / s0.278
Total hash rate of the network in Pheshey / s (1,000,000 Gheshey / s)15 198
Electricity consumption per transaction (kWh)246.00
Number of US households that could operate on the Bitcoin electricity network3 311 767
Number of US households that can work a day from electricity consumed by a single transaction8.33
Bitcoin share in global energy consumption0.16%
Compliance with annual carbon dioxide emissions (in thousand tons)17,526
Compliance with carbon dioxide emissions per transaction (kg)120.77

According to the conventional model of energy consumption and some assumptions of Digiconomist, the cost of miners for electricity correlates with the cost of mined coins in a certain proportion. So electricity consumption is calculated on the basis of the market value of the coins mined and the cost of electricity 5 cents per 1 kWh. Representatives of Digiconomist recognize all the conventions and errors of such a model. But they are confident that the consumption of electricity in the Bitcoin network should be considered precisely with reference to the economy, and not according to the number of gigabytes in the network. Their analysis showed that the hashrate estimate gives a very underestimated result. And the assessment of the economy seems to be quite logical. In fact, the cost of electricity and equipment (the cost of mining) should be some part of the mined coins, leaving a reasonable share of profitability. If the profitability becomes large enough, new users will be interested in mining, so the profitability should return to the previous level. In the Digiconomist calculation, this time lag is taken into account between the growth of profitability, the arrival of new miners and the return of profitability to the previous level.

Of course, many doubt this conventional model of Digiconomist. For example, according to investor Mark Bevan , electricity consumption here is 1.5–3.6 times overestimated. However, this does not fundamentally change the situation, only slightly shifts the exponent graph in time.

If you believe in the "economic model", then the cost of electricity for mining will increase in proportion to the increase in the cost of Bitcoin on the market, with a certain lag. Therefore, it is not surprising that energy consumption is growing at such rates: by 25-30% per month.

If the trend continues (an increase of 25-30% per month), then nothing good awaits us. For example, alarmists from the ZeroHedge organization calculated that by October 2018, the power consumption of the Bitcoin network would be equal to the UK (309 TWh), in July 2019 - with the USA (3913 TWh), and in February 2020 Bitcoin “will consume all electricity in the world ”(21,776 TWh).

According to the formula for growth of 25-30% per month, such a schedule goes.

Bitcoin mining share forecast in global power consumption

It is difficult to imagine a world in which all the electricity is spent only on mining Bitcoins, but this is what the ZeroHedge organization displays on the graph.

Even if one imagines that bitcoin costs a lot of money, if one does not spend electricity for other purposes, then chaos will occur in the world - and Bitcoin will immediately depreciate, just like in the besieged Leningrad, gold was exchanged for bread.

Of course, these forecasts and ZeroHedge charts are sucked from the finger. For example, experts interviewed by The Washington Post believe that by 2020, mining cryptocurrency will be only 1% of US energy consumption or 0.14% of global consumption. That is, only as 1–3 nuclear reactors. Of course, this is a much more conservative and realistic estimate.

Best Comment ( BOM )
The article is not enough extrapolation. By 2050, the mining of Bitcoin will require the energy of the entire galaxy, both kinetic and potential. And the cost of one bitcoin will be equal to the cost of an gold ingot the size of Betelgeuse. Earth will conquer poverty, because everyone will be incredibly rich. World medicine, having received a powerful flow of charitable funds from bitcoin rich people in the amount of twenty quintillion dollars, will move forward and develop medicines for all diseases in the world except the common cold. Spaceships will plow intergalactic space. Turning off the water in May will be reduced by one day.


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