The other side of the Coin

Miners of the cryptocurrency BITCOIN, use more electricity than 159 countries in the world.

If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.

I might type that again.

If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.

Think about that for a moment… [or even two]

At this rate it would

• Be greater than Australian electricity consumption by early 2018 ( 224 TWh)
• Be greater than UK electricity consumption by October 2018 (309 TWh)
• Be greater than US electricity consumption by July 2019 (3,913 TWh)

There is a real “run” globally, because consider these “returns”

Ten dollars $10  invested 7 years ago is now “worth” over $1 million That sound you may hear is people jumping on the bandwagon…

• 2011: +1,724%
• 2012: +170%
• 2013: +5,838%
• 2014: -67%
• 2015: +37%
• 2016: +120%
• 2017: +701%  [Source @PrestonPysh]

Whilst writing this article, Bitcoin passed the $USD9000 dollar mark and has peaked a little over USD$ 9600…$BTC.X

You may ask yourself “why do bitcoins have value“. My personal view is that any parent that has had to explain to their children why they should not give away their brand new bicycle in exchange for a “golden swap card” has some sense of the global bubble formed around bitcoin… but that is for another time.

1 Bitcoin currently equals $12, 689.03 Australian Dollars. The price movements look like this.

Ever since its inception Bitcoin’s trust-minimizing consensus has been enabled by its proof-of-work algorithm. The machines performing the “work” are consuming huge amounts of energy while doing so.

Energy, a real commodity.

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.

Consider that the country of IRELAND used 25 TWh.

That’s the equivalent of 0.13% of total global electricity consumption. While that may not sound like a lot, it means Bitcoin mining is now using more electricity than 159 individual countries (as you can see from the map above). More than Ireland or Nigeria [ and almost all of Africa].

Bitcoin miners use the equivalent of approximately 13% of Australia’s total energy use.

Our island neighbour, Timor-Leste sees bitcoin miners use the equivalent of 23184% MORE electricity than their entire island nation.

If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption.

In 2015 we knew that with about 110,000 transactions per day works out to 1.57 US households daily usage of electricity per Bitcoin transaction. Consider that every time you buy something in Bitcoin, you could be using as much electricity as 1.57 American families do in 24 hours.

Exponentiation anyone?

Energy policy?

The trends.

• 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 annualised global mining revenues: $7.2 billion USD (£5.4 billion)
• Estimated global mining costs: $1.5 billion USD (£1.1 billion)

Links

• Digiconomist’s Bitcoin Energy Consumption Index
• Electricity & Bitcoin – Business Insider
• The BitCoin & Blockchain energy hogs – The Conversation
• BitCoin is unsustainable – Motherboard[2015]
• Blockchain
• Bitcoin Ticker
• History of Bitcoin – Wikipedia
• Why do bitcoins have value
• Bitcoin Price
• BitCoin.com.au