Several studies imply that the Bitcoin network consumes 80 terawatt-hours of electricity annually. In this article, we are going to find out what are the implications of bitcoins consumption of energy and how it functions.
How much Electricity does Bitcoin consume globally?
Mining Bitcoins include particular usage of high-end computers and their ability to solve complicated matters of algorithms. Studies at the University of Cambridge show that globally Bitcoins use 80 terawatt-hours of electricity in the BITCOIN ELECTRICITY CONSUMPTION INDEX.
For your better understanding, it matches the entire annual consumption of energy of Finland. Or, it also equals the amount of energy produced by 385 ships off AA alkaline lifelong batteries. Thus, Bitcoin is often judged as a big and high-energy resource consumer.
The Implications: A Guide
Such high energy or electricity consumption often puts cryptocurrency at the question of being planet-friendly. Also, it highlights the currency’s value. To understand the scenario better, researchers start by analyzing and geolocating the mining activity using the miner’s IP addresses. Then, the local scenario of power sources is brought into assumption from those places.
Studies say that around 62% of miners use hydropower as the source of energy, whereas 38% source it from coal. Around 39% use miscellaneous sources such as geothermal or solar or wind. However, these statistics are based on assumptions, and the total resource can sum up depending on the current price of Bitcoin and also the price of particular energy consumed as per global rates. For example, energy can be easily derived from hydro plants in China’s Sichuan during the rainy season.
Why is it so high?
Mining Bitcoin is a pretty rewarding process. At the end of every successful mine, there awaits a Bitcoin as a reward for the successful miner. The mining process is a crazy gamble of hi-tech computers solving complicated programming and puzzles and the first miner who can solve one puzzle will be rewarded. Such a hefty reward, a huge source of revenue compels miners to run high-powered machines continuously.
This results in high usage of electricity. It also depends upon the availability of coins in the market. With the increasing number of coins in the market, time required to mine the coins increases. This results in more electricity consumption as the process becomes more extensive.
Advocates often claim that several industries consume electricity as high as Bitcoins, and they too must be taken account into. The main musketeer they have carried along themselves are ATMs and data centers of Banks which are pretty much in function 365/24/7.
Many sectors claim that Bitcoin consumes way less energy than that. In defense of such high consumption of electricity, they declare that they can expedite new solar or wind plants without exploiting any other sources that use similar energy.
Rising Issues Now
Due to such high electricity consumption, many have questioned Bitcoin’s integrity towards the preservation of natural energy. Many well-known faces and cryptocurrency users stopped accepting Bitcoin as a medium of payment due to the raging environmental concerns. This on the whole resulted in a downfall in the currency’s value.
In China, the government’s social controlling regulations added with the nature conserving issues has put the currency’s financial system at risk, resulting in a deeper downfall. To know more, you can have a look at https://bitcointrend.app/
Also, the machines used by miners to untangle a blockchain do not last long. The devices use a good number of chips to produce the machines. Several analytical reports and debates and the current scenario of the pandemic resulted in the nonavailability of the chips which resulted in the further downfall of the currency’s value.
In this article we tried to make an idea about Bitcoin’s consumption of energy. It can be said that since the process of mining circles around computer’s electricity consumption cannot be overruled. We sincerely hope this helps you. Good luck!