Chinese mining facilities were located in Sichuan, using cheap hydropower for mining Bitcoin. Indeed, Bitcoin's energy consumption is designed to fall in the long run. While working on the blockchain these miners arent required to trust each other. Energy consumption model and key assumptions Even though the total network hashrate can easily be calculated, it is impossible to tell what this means in terms of energy consumption as there is no central register with all active machines (and their exact power consumption). One might assume that the use of hydropower implies that the Bitcoin network has a relatively low carbon footprint. This will typically be expressed in Gigahash per second (1 billion hashes per second). The Bitcoin price at the time had just dropped 60 compared to the peak just several months before. Changing Bitcoin by regulatory fiat would require a coordinated global regulatory effort, which doesn't seem likely to happen any time soon. In the past, energy consumption estimates typically included an assumption on what machines were still active and how they were distributed, in order to arrive at a certain number of Watts consumed per Gigahash/sec (GH/s). The Bitcoin network consumes massive amounts of energy. A Bitcoin asic miner will, once turned on, not be switched off until it either breaks down or becomes unable to mine Bitcoin at a profit.
But other cryptocurrencies have been exploring alternatives. The astronomical power draw is a facet of how the bitcoin network protects itself against fraud. When Bitcoin launched in 2009, each block came with a 50-bitcoin reward for the miner who created. All of which means that Bitcoin's power-hungry ways are unlikely to change any time soon.
Although power consumption of other payment networks is harder to isolate, one of Visas two US data centres reportedly runs on about 2 of the power required by bitcoin. For this reason, mining is sometimes compared to a lottery where you can pick your own numbers. The Bitcoin Energy Consumption Index therefore proposes to turn the problem around, and approach energy consumption from an economic perspective.
Anyone can check and verify this. Cash also requires vast amounts of resources. Previous periods of sustained growth, in 20, each ended with substantial busts, leading commentators to label them, in hindsight, as speculative bubbles. The media often pushes the narrative that Bitcoin mining is a waste of electricity: Virtual Bitcoin Mining Is a Real-World Environmental Disaster, bloomberg, bitcoins are a waste of energy - literally, aBC AU, bitcoin Could Consume as Much Energy as Denmark by 2020, breitbart. Bitcoin could potentially switch to such an consensus algorithm, which would significantly improve sustainability. Every miner individually confirms whether transactions adhere to these rules, eliminating the need to trust other miners. Comparing Bitcoins energy consumption to other payment systems To put the energy consumed by the Bitcoin network into perspective we can compare it to another payment system like visa for example. We also know visa processed 111.2 billion transactions in 2017. But that's easier said than done. At the moment (January 2019 miners are spending a lot more on electricity. With no centralised authority confirming transactions, bitcoin is instead backed by miners, who put specialised computers to work churning through extremely power-intensive computing problems. Each time a new block is mined, new coins are created.
The cryptocurrency uses as much CO2 a year as 1m transatlantic flights.
We need to take it seriously as a climate threat.
Bitcoin uses x energy in total, and this energy verifies/secures roughly 300k transactions per day.
So this measure shows the value we get for all that electricity, since the verified transaction.