Energy News  
ENERGY NEWS
Bitcoin estimated to use half a percent of the world's electric energy by end of 2018
by Staff Writers
Washington DC (SPX) May 22, 2018

illustration only

Bitcoin's burgeoning electricity demands have attracted almost as much attention as the cryptocurrency's wildly fluctuating value. But estimating exactly how much electricity the Bitcoin network uses, necessary for understanding its impact and implementing policy, remains a challenge.

In the first rigorously peer-reviewed article quantifying Bitcoin's energy requirements, a Commentary appearing May 16 in the journal Joule, financial economist and blockchain specialist Alex de Vries uses a new methodology to pinpoint where Bitcoin's electric energy consumption is headed and how soon it might get there.

"We've seen a lot of back-of-the-envelope calculations, but we need more scientific discussion on where this network is headed. Right now, the information available is pretty poor quality overall, so I'm hoping that people will use this paper as a foundation for more research," says de Vries, who works at the Experience Center of PwC in the Netherlands and is the founder of Digiconomist (@DigiEconomist), a blog that aims to better inform cryptocurrency users.

His estimates, based in economics, put the minimum current usage of the Bitcoin network at 2.55 gigawatts, which means it uses almost as much electricity as Ireland. A single transaction uses as much electricity as an average household in the Netherlands uses in a month. By the end of this year, he predicts the network could be using as much as 7.7 gigawatts - as much as Austria and half of a percent of the world's total consumption.

"To me, half a percent is already quite shocking. It's an extreme difference compared to the regular financial system, and this increasing electricity demand is definitely not going to help us reach our climate goals," he says. If the price of Bitcoin continues to increase the way some experts have predicted, de Vries believes the network could someday consume 5% of the world's electricity. "That would be quite bad."

Bitcoin is dependent on computers that time-stamp transactions into an ongoing chain to prevent duplicate spending of coins. Computers in the network perform calculations continuously, competing for the chance, once every ten minutes, to be appointed to create the next block of transactions in the chain. The user of the computer that wins is awarded 12.5 new coins - a process known as "mining" Bitcoin.

But all the time, even the users that don't win are expending computing power. "You are generating numbers the whole time and the machines you're using for that use electricity. But if you want to get a bigger slice of the pie, you need to increase your computing power. So there's a big incentive for people to increase how much they're spending on electricity and on machines," de Vries says.

It's figuring out when that incentive stops paying off that is at the heart of de Vries's estimation method. Economic principles suggest that the entire Bitcoin network will eventually reach an equilibrium where the costs of the hardware and electricity used to mine equal the value of the Bitcoin being mined. And that information can approximate the total amount of electricity that the network will use at said equilibrium.

Other researchers have used the fundamentals of this method before, but de Vries goes farther. He uses production information about Bitmain, the biggest manufacturer of Bitcoin mining machines, to estimate both how much of a miner's costs are associated with hardware rather than electricity and when this equilibrium might be reached.

And while he does have confidence in his estimates, the problem with this method is that these manufacturers are extremely secretive. "Sometimes the best information we've got is really shaky eyewitness accounts. That's the stuff we have to work with," he says.

Still, he believes that getting a good estimate is important in determining the sustainability of cryptocurrencies moving forward and in helping shape policy around them. Some states in the U.S. have already started to put restrictions around Bitcoin mining. "But you need to base your policy on something. And I think that my method is important in that regard, because it's very forward-looking. It's focused not on the now, but on where we're headed. And I think that's something you really need to know if you're going to draft policy about it," he says.

He also points out that there is plenty of room for discussion of his method. "I think everyone agrees on the minimum energy consumption. But the future estimate? That's actually quite debatable. We don't really have a common approach to getting to a future estimate of electricity consumption right now, which is why I am hoping to get this conversation started. I'm doing this research, but a lot of people should be doing it."

Research Report: "Bitcoin's Growing Energy Problem"


Related Links
Cell Press



Thanks for being here;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor
$5 Billed Once


credit card or paypal
SpaceDaily Monthly Supporter
$5 Billed Monthly


paypal only


ENERGY NEWS
New phase of globalization could undermine efforts to reduce CO2 emissions
Norwich UK (SPX) May 15, 2018
New research reveals the growth of carbon production from Chinese exports has slowed or reversed, reflecting a "new phase of globalisation" between developing countries that could undermine international efforts to reduce emissions. The study, involving researchers from the University of East Anglia (UEA) and colleagues in China and the United States, investigated how complex supply chains are distributing energy-intensive industries and their CO2 emissions throughout the global South. It found th ... read more

Comment using your Disqus, Facebook, Google or Twitter login.



Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle

ENERGY NEWS
Portugal's EDP rejects Chinese takeover offer

New phase of globalization could undermine efforts to reduce CO2 emissions

Carbon taxes can be both fair and effective, study shows

Trump rolls back Obama-era fuel efficiency rules

ENERGY NEWS
Simple equation directs creation of clean-energy catalysts

New device could increase battery life of electronics by a hundred-fold

Microwaved plastic increases lithium-sulfur battery lifespan

Scientists discover how a pinch of salt can improve battery performance

ENERGY NEWS
European wind energy generation potential in a warmer world

New York to world's largest offshore wildlife aerial survey

German utility E.ON sees renewable sector growth

Germany's E.ON wants even bigger wind footprint

ENERGY NEWS
Recurrent Energy Secures Financing and Tax Equity Investment for North Carolina Project

NYSERDA Announces $10 Million Available to Launch New Cleantech Accelerator

ABC Solar Seeking Legal Funds from CrowdJustice.com for Monopoly Abuse Fight

Large-scale solar shines in Queensland during record year

ENERGY NEWS
Framatome to provide Dominion Energy with steam generator services

Nuclear Waste Management Organization Signs Co-Operation Agreements With International Partners

Demonstration proves nuclear fission system can provide space exploration power

Framatome and Vattenfall sign contracts for the delivery of fuel assembly reloads

ENERGY NEWS
New catalyst upgrades greenhouse gas into renewable hydrocarbons

Key enzyme for production of second-generation ethanol discovered in Brazilian Amazon

World's strongest bio-material outperforms steel and spider silk

Toward organic fuel cells with forest fuels

ENERGY NEWS
Oil prices caught between U.S. policies on Iran, China

Five dead in attack on Afghan pipeline project

Australia's Santos mulling sweeter offer from Harbour

Russia may revisit inflation targets

ENERGY NEWS
Climate change in Quebec equals a much greater diversity of species?

Schwarzenegger urges Trump to 'join us' on climate action

GRACE-FO Will Help Monitor Droughts

Projecting climate change along the Millennium Silk Road in a warmer world









The content herein, unless otherwise known to be public domain, are Copyright 1995-2024 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. General Data Protection Regulation (GDPR) Statement Our advertisers use various cookies and the like to deliver the best ad banner available at one time. All network advertising suppliers have GDPR policies (Legitimate Interest) that conform with EU regulations for data collection. By using our websites you consent to cookie based advertising. If you do not agree with this then you must stop using the websites from May 25, 2018. Privacy Statement. Additional information can be found here at About Us.