Bitcoin’s electricity usage is enormous. In November, the power consumed by the entire bitcoin network was estimated to be higher than that of the Republic of Ireland. Since then, its demands have only grown. It’s now on pace to use just over 42TWh of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru, according to
estimates from Digiconomist. That’s commensurate with CO2 emissions of 20 megatonnes – or roughly 1m transatlantic flights.
That fact should be a grave notion to anyone who hopes for the cryptocurrency to grow further in stature and enter widespread usage. But even more alarming is that things could get much, much worse, helping to increase climate change in the process.
Burning huge amounts of electricity isn’t incidental to bitcoin: instead, it’s embedded into the innermost core of the currency, as the operation known as “mining”. In simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.
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The more electricity you burn, and the faster your computer, the higher your chance of winning the competition. The prize? 12.5 bitcoin – still worth over $100,000 – plus all the transaction fees paid in the past 10 minutes, which according analysts’ estimates is another $2,500 or so.
This is a winner-takes-all game, where the prize is guaranteed to be paid to one, and only one, miner every 10 minutes. Burning more electricity increases your chances of winning, but correspondingly decreases everyone else’s – and so they have a motivation to burn more electricity in turn.