A recent study conducted by Alex de Vries, a Dutch economist working for PricewaterhouseCoopers (PwC) has revealed that bitcoin now uses as much energy as Ireland and could match Austria by end of 2018.
The global Bitcoin network currently consumes at least 2.55 gigawatts of electricity, a figure that has roughly doubled in the last 6 months, and new research suggests that this figure could triple this by the end of 2018.
The Bitcoin blockchain uses an algorithm known as Proof of Work (PoW) to achieve its security and distributed consensus. So-called miners are paid in Bitcoin as they verify the agreed state of the ledger. It is the mining that uses the majority of energy required to keep the cryptocurrency functioning.
The actual consumption of power is difficult to ascertain with any degree of accuracy, due to not knowing the exact figures of CPU usage, cooling and other electricity used in the mining process. Further complications in estimating true energy consumption of the bitcoin blockchain can also be attributed to the element of secrecy which often lays behind the mining process and even problems associated with finding details of the equipment used.
Mining efficiency, according to the research, is a factor in the power drain, as most miners are less efficient than lowest estimate figures; the calculation that the 10,000 nodes in the bitcoin network are all single, highly efficient, purpose-built machines such as the Antminer S9. In an optimum case such as this would calculate to about 2.55 gigawatts, which is little less power than used by Ireland.
De Vries’s worst-case scenario sees power used on the bitcoin network matching that of Austria’s total power consumption in the near future, even as early as the end of 2018 if a solution isn’t found. Factors such as the price of Bitcoin, efficiency improvements to the application-specific integrated circuits (ASICs), electricity prices, the number of new miners, local restrictions and many other issues are all significant elements in trying to gauge future usage figures.
Alternative models exist and are beginning to attract other decentralized networks away from Bitcoin because of its enormous consumption of energy. Ethereum claims to be working the towards Proof of Stake, and other models, such as Delegated Proof of Stake, and Capacity and Proof of Resource may be future solutions to the current power drain problem.
Iceland has become the mining location of choice due to its cheap geothermal resources, but already miners are using more than the country’s citizens
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