The popularity of bitcoin has reached a point where it has started to bring new cryptocurrencies to life. As of 2018, there are over 1600 cryptocurrencies in existence amounting to $369 billion in market cap.
However, Bitcoin stands as the undisputed king when it comes to the most popular cryptocurrency. Now there are two ways you can earn Bitcoin - one is by buying it from someone using fiat money or using other cryptos that equal in value.
Started in 2008, the digital currency Bitcoin has now taken the world by storm. The amount of electricity spent in the process of Bitcoin mining has essentially become a topic of heavy debate since past few years.
Since many cannot afford to buy Bitcoin straight from people, they turn to mining. Mining was once a very popular method of earning Bitcoin, and all you had to do was verify ongoing payment in Bitcoin within the blockchain network.
However, mining requires a certain amount of processing power. The more processing power you have, the faster you will be able to verify payments.
In recent years, the obsession with Bitcoin has made miners grow in numbers. The growth has continued to an extent where we even have dedicated mining companies now.
But if the number of miners increases in number, it can lead to more number of Bitcoins being mined. And if mining companies are involved, the Bitcoin reserve (21 million) might zap out very quickly, right? Not exactly!
The Bitcoin blockchain is actually pretty clever. With the increasing number of miners on the network, the blockchain makes it harder to verify payments, or in other words, makes it harder to mine. Also, the portion of bitcoin to be released will also shrink.
This means people need more processing power to verify payments or solve hashes to get Bitcoin. And, this has led to a major increase in power draw.
Bitcoin miners’ use combination of graphics cards to increase the power of their mining rig. The result is a pretty power hungry system that runs on a lot of electricity.
If a two top-tier graphics card setup draws a lot of power, think about the mining companies who use hundreds and thousands of graphics cards to mine Bitcoins.
The latest study published in the journal Joule, suggests that the entire Bitcoin network consumes about 2.55 gigawatts of electricity currently, and can reach to 7.67 gigawatts in future by the end of the year.
This energy consumption is large enough to power a country the size of Austria.
Another study finds that one Bitcoin transaction will consume about 250kWh of power, which is enough to power an average home for 9 days. Currently, the network uses energy that’s more than what is required to run countries like Siberia.
The same report found that the Bitcoin network emits about 7.7 million tons of carbon dioxide every year. These findings are actually shocking as Bitcoin isn’t even a real currency.
Another estimate suggests that electricity consumption through Bitcoin mining would be greater than the US currently uses, and by 2020, it will consume all the electricity the world uses today. We might see lowered energy consumption if the cryptocurrency market loses momentum, and solutions such as Lightning Network to improve the network throughput gets implemented.
But as of now, the problem with Bitcoin is certainly big and is rapidly growing.