From Reader George:

(I do not understand the concept of mining bitcoins. so this theory is a mystery to me. I don't now how bitcoins work and don't understand the concept of mining them either. I thought it was simply digital currency that is verified by the main company that issued it. I wouldn't think that would take that much electricity to confirm a digital currency transaction.)

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by Tyler Durden
Nov 24, 2017 6:30 PM

Via PowerCompare.co.uk,

Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst.

However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins.
How Does Bitcoin Mining Consume Electricity?

At a very basic level Bitcoin mining requires expensive and power hungry computer hardware. As the the IEEE explains:

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Mining power is high and getting higher, thanks to a computational arms race. Recall that the required number of zeros at the beginning of a hash is tweaked biweekly to adjust the difficulty of creating a block—and more zeros means more difficulty.

The Bitcoin algorithm adds these zeros in order to keep the rate at which blocks are added constant, at one new block every 10 minutes. The idea is to compensate for the mining hardware becoming more and more powerful.

When the hashing is harder, it takes more computations to create a block and thus more effort to earn new bitcoins, which are then added to circulation.

According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh.

That’s the equivalent of 0.13% of total global electricity consumption. While that may not sound like a lot, it means Bitcoin mining is now using more electricity than 159 individual countries (as you can see from the map below). More than Ireland or Nigeria.

If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption.

Here are a few other interesting facts about Bitcoin mining and electricity consumption:

In the past month alone, Bitcoin mining electricity consumption is estimated to have increased by 29.98%

If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.

Estimated annualised global mining revenues: $7.2 billion USD (£5.4 billion)

Estimated global mining costs: $1.5 billion USD (£1.1 billion)

Number of Americans who could be powered by bitcoin mining: 2.4 million (more than the population of Houston)

Number of Britons who could be powered by bitcoin mining: 6.1 million (more than the population of Birmingham, Leeds, Sheffield, Manchester, Bradford, Liverpool, Bristol, Croydon, Coventry, Leicester & Nottingham combined) Or Scotland, Wales or Northern Ireland.

Bitcoin Mining consumes more electricity than 12 US states (Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming)