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|Bitcoin may consume
most of the world's electricity.
An analysis of the potential electricity consumption of the Bitcoin network.
Guy Lane update May 2015.
is the world's most popular form of digital money. Created in vast
warehouses full of computers, the bitcoin 'mining' process consumes
huge amounts of electricity. This is a problem because there are many
competing demands for electricity. Also, most electricity comes with a
huge carbon footprint.
a new type of digital money, threatens to consume more than half of the
world’s electricity supply according to an Australian sustainability
While bitcoins have no physical form, they are created in air-conditioned warehouses full of energy-hungry computer chips, a process known as bitcoin ‘mining’.
The energy consumption calculations have been performed by Queensland-based sustainability expert, Guy Lane and displayed on the website www.bitcarbon.org.
According to Lane, bitcoins are on the verge of becoming a modern day doomsday machine, a planet-destroying mechanism that cannot be turned off.
“The spiralling electricity consumption of the bitcoin mining network is a systemic design mechanism that seeks to moderate the production of new bitcoins,” said Lane.
“Unfortunately, the geeks who invented bitcoin failed to account for that fact that we humans live inside the biosphere of planet Earth and not an orbiting space-station powered by fusion reactors,” Lane said.
The bitcoin energy calculation is based on an assumption that bitcoins will one day be worth a million dollars each, and that miners will be prepared to spend thousands on power bills to acquire them.
The million-dollar bitcoin theory has the support of finance analysts Henry Bludget from Business Insider Australia and Gil Luria from investment bank Wedbush Securities.
Bitcoins are currently worth about US$230 each, down from a high of over $1,100 in December 2013 and up from $0.06 in 2010.
The energy audit model assumes that miners will spend half the value of million-dollar bitcoins - $500,000 - on electricity to mine a bitcoin, a figure that might be conservative.
The energy calculation shows that the bitcoin mining network could consume 13,140 terawatt hours of electricity a year, representing 59.6% of global electricity production.
“There is still time to put the bitcoin genie back in the bottle,” Lane says.
“However, if we fail to act, bitcoin could ruin an already overheated planet as bitcoin mining factories spread around the world chasing cheap electricity from filthy coal fired power stations.”
Lane has made his calculations public via the interactive spreadsheet below.
image below to download the .xls spreadsheet.