Bitcoin On Track to Hit 0.5% of Global Power Demand by End of 2018
Bitcoin’s energy footprint has more than doubled in the last six months and is expected to double again by the end of the year, bringing its total consumption to 0.5% of world electricity production, according to a peer-reviewed study reported by the American Association for the Advancement of Science (AAAS) in mid-May.
The technology’s massive and growing power demand means that “you libertarian nerds look even worse than usual,” Grist snarks, in its headline for a report by veteran U.S. meteorologist and climate hawk Eric Holthaus.
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Although study author, economist, and data consultant Alex de Vries has issued critiques of Bitcoin’s energy voracity before, this is the first time he’s been published in a peer-reviewed journal. His numbers add up to “a troubling trajectory, especially for a world that should be working overtime to root out energy waste and fight climate change,” Holthaus writes.
“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,” AAAS notes. “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,” de Vries said. “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.” If Bitcoin prices rise as some experts expect, he said the phenomenon could eventually gobble up 5% of the world’s electricity.
More imminently, “by late next year, Bitcoin could be consuming more electricity than all the world’s solar panels currently produce—about 1.8% of global electricity, according to a simple extrapolation of the study’s predictions,” Holthaus notes. “That would effectively erase decades of progress on renewable energy.”
The problem arises because “the process of ‘mining’ for coins requires a globally distributed computer network racing to solve math problems—and also helps keep any individual transaction confidential and tamper-proof,” he explains. “That, in turn, requires an ever-escalating arms race of computing power—and electricity use—which, at the moment, has no end in sight.”
Bitcoin enthusiasts accuse de Vries of being overly pessimistic about their [exciting innovation get-rich-quick scheme] technology. “But, as de Vries writes in the study, his estimates could also be missing out on secretive or illegal participation in the network, meaning there’s maybe even more happening than meets the eye,” Holthaus notes.
“It’s a telling social phenomenon of late capitalism that we are willing to construct elaborate computer networks to conduct secure transactions with each other,” he adds, “in the process torpedoing our hopes at a clean energy future.”