In Motherboard magazine, a climate researcher asks how much energy Bitcoin could need in the long term. The result is not necessarily suitable for turning climate protectors into crypto fans – but it is also based on questionable assumptions.
Sebastian Deetman researches climate policy and resource efficiency at the Dutch University of Leiden. He recently became, as he writes in Motherboard, a “Bitcoin enthusiast”. He explores a possible conflict between these two passions in a detailed article. Bitcoin is “incredibly energy-intensive.” As early as mid-2015, a journalist had calculated that a single Bitcon transaction consumed as much energy as 1.7 US households per day.
Deetman then has several scenarios formed to calculate how much energy Bitcoin can use in the future. The results for 2020 are somewhere between the output of a small power plant and the Danish market.
The researcher even turns a blind eye: He only takes into account the power consumption of the miners, not that of the nodes, the Bitcoin ATMs, exchanges, etc. It takes the hashrate (the number of hashes that the network produces per second) and the efficiency of the mining hardware, which is announced on the manufacturer’s website, as a starting point. Then he assumes different efficiency distributions of the miners who set the current hashrate. I did not do it much differently in a 2014 article. Whatever power miners spend on mining bitcoin, it will always be unstable but the growing currency of the crypto world, more about bitcoin pricing here https://cryptoine.com/bitcoin-price/.
The result: To generate 800 petahashes per second, 10,000 tons of hardware are required – enough material to build a second Eiffel Tower. These currently consume around 350 megawatts, which corresponds to around 280,000 US households.
After all, Deetman’s research shows that the energy consumption of a miner per gigahash is falling rapidly.
The technological advances made by chip and hardware manufacturers seem to mean that Bitcoin mining will likely be more than three times more efficient in the future. I could retire without feeling guilty. Or?
Of course not. That would have been a milkmaid bill too. Instead there was a question that Deetman “drove around at night”:
Could it be that as the use of Bitcoin grows, the total hashrate of the network grows too, at a rate that overtakes the increase in miner’s efficiency? Would it be possible that the absolute energy consumption would increase?
The question is, I think, pointless. The energy consumption of the miners always corresponds to the income of the miners as well as their location. For example, one can assume that the miners’ electricity consumption corresponds to their income in relation to cheap electricity prices like in Iceland or Venezuela minus the depreciation for the hardware. Neither the use of Bitcoin, nor the energy efficiency of the hardware has any influence on power consumption. The only value that matters is the miner’s income. And these become less with every halfing.
Whether the power consumption of the miners has anything to do with the climate is another question. Because when the miners are in places where energy is produced in a climate-neutral way and almost free of charge, as in Iceland, it doesn’t really matter how much energy they consume. In countries with many coal, gas and nuclear power plants, such as France, Austria or Belgium, there won’t be as many miners anyway. But let’s get back to Deetman’s article.
The climate researcher has modeled the growth of the historical hashrate and tries to derive future developments from it.
Since the introduction of the first ASIC mining hardware in January 2013, the monthly growth of the hashrate has been a whopping 37 percent. If we take that as a stop for the coming years, the Bitcoin network will consume more electricity at the end of 2016 than is currently produced globally (yes, in December this year, regardless of assumptions about the efficiency of mining).
Crazy … more than is produced worldwide? It can’t be, can it? This would require the miners’ income – after the halfing in summer! – Exceed the remaining global power consumption.
That could not be correct. Bitcoin price soared in 2013, breaking the $ 1,000 mark at the end of the year and again in early 2014. That price hike appeared to have been an anomaly, fueled by the hype, and it seemed to affect my calculations for future hashrate growth. { {1}}
So let’s assume that there is no more such hype, no + 1000% increase, let’s ignore the halfing and assume the growth rates of the last few months. These are highlighted in blue in the graphic.
“Bitcoin could use as much electricity as Denmark in 2020.”
Published on March 30, 2016 by Christoph Bergmann // 19 comments
Eurodif Nuclear Power Plant, Tricastin, France. Image from IAEA Imagebank via flickr.com. License: Creative Commons
In Motherboard magazine, a climate researcher asks how much energy Bitcoin could need in the long term. The result is not necessarily suitable for turning climate protectors into crypto fans – but it is also based on questionable assumptions.
Sebastian Deetman researches climate policy and resource efficiency at the Dutch University of Leiden. He recently became, as he writes in Motherboard, a “Bitcoin enthusiast”. He explores a possible conflict between these two passions in a detailed article. Bitcoin is “incredibly energy-intensive.” As early as mid-2015, a journalist had calculated that a single Bitcon transaction consumed as much energy as 1.7 US households per day.
Deetman then has several scenarios formed to calculate how much energy Bitcoin can use in the future. The results for 2020 are somewhere between the output of a small power plant and the Danish market.
The researcher even turns a blind eye: He only takes into account the power consumption of the miners, not that of the nodes, the Bitcoin ATMs, exchanges, etc. It takes the hashrate (the number of hashes that the network produces per second) and the efficiency of the mining hardware, which is announced on the manufacturer’s website, as a starting point.Then he assumes different efficiency distributions of the miners who set the current hashrate. I didn’t do it much differently in an article in 2014.
The result: 10,000 tons of hardware are required to generate 800 petahashes per second – enough material to generate a second one Build Eiffel Tower. These currently consume around 350 megawatts, which corresponds to around 280,000 US households.
After all, Deetman’s research shows that the energy consumption of a miner per gigahash is falling rapidly.
The technological advances made by chip and hardware manufacturers seem to mean that Bitcoin mining will likely be more than three times more efficient in the future. I could retire without feeling guilty. Or?
Of course not. That would have been a milkmaid bill too. Instead there was a question that Deetman “drove around at night”:
Could it be that as the use of Bitcoin grows, the total hashrate of the network grows too, at a rate that overtakes the increase in miner’s efficiency? Would it be possible that the absolute energy consumption would increase?
I think the question is pointless. The energy consumption of the miners always corresponds to the income of the miners as well as their location. For example, one can assume that the miners’ electricity consumption corresponds to their income in relation to cheap electricity prices like in Iceland or Venezuela minus the depreciation for the hardware. Neither the use of Bitcoin, nor the energy efficiency of the hardware has any influence on power consumption.The only value that matters is the miner’s income. And these become less with every halfing.
Whether the power consumption of the miners has anything to do with the climate is another question. Because when the miners are in places where energy is produced in a climate-neutral way and almost free of charge, as in Iceland, it doesn’t really matter how much energy they consume. In countries with many coal, gas and nuclear power plants, such as France, Austria or Belgium, there won’t be as many miners anyway. But let’s get back to Deetman’s article.
The climate researcher has modeled the growth of the historical hashrate and is trying to derive future developments from it.
Since the introduction of the first ASIC Mining Hardware in January 2013, monthly hashrate growth was a whopping 37 percent. If we take that as a stop for the coming years, the Bitcoin network will consume more electricity at the end of 2016 than is currently produced globally (yes, in December this year, regardless of assumptions about the efficiency of mining).
Crazy … more than is produced worldwide? It can’t be, can it? This would require the miners’ income – after the halfing in summer! – Exceed the remaining global power consumption.
That could not be correct. The Bitcoin price rose rapidly in 2013,
