The issue of energy consumption is especially critical for Bitcoin
miners. Hashing demands more and more capacity so the bitcoin miners
have to continuously increase the number of pieces of equipment, thus
consuming more and more electricity.
The findings of research of Leiden University ecologists are
striking: the scientists came to a conclusion that, within ten years
from now, cryptocurrencies production will be devouring as much
electricity as a small country is able to produce, like Denmark for
instance. The article about future of mining energy consumption was
posted in a reputable online news portal Motherboard.
What is Mining and How Crypticurrency is Produced?
Bitcoin is a product of solution of multiple mathematical problems.
The mathematical problems are handled by computers located in various
parts of the Earth. Such location mode guarantees safety and security.
A single data centre controls the result but it doesn’t control the
Miners are specialists with a task to find a single hash among
millions of combinations. A miner who was the first to find a correct
hash will be rewarded with 25 bitcoins, easily exchangeable into actual
currency. The reward is quite significant – one bitcoin costs over 400
The problem is that miners need more and more capacities to leave
their competitors in the dust and to get the prize. At the beginning
one personal laptop was sufficient for successful mining, but
eventually miners started to use powerful video cards in order to
increase the chances of success, and later on turned to specialized
reprogrammed chips and integrated circuits.
After purchase of all the required equipment, the only miner’s
expenditure will be his/her bills for electricity consumption. However,
the complexity of calculations is constantly increasing, slowing down
miner’s return on investment in equipment– if in 2011 a miner was able
to return the money spent on a powerful video card within 2 weeks, in
2016 it will cost you about 300 US dollars to produce one bitcoin.
Besides, miners’ reward is constantly decreasing too – it is expected
that soon miners will be getting only 12.5 bitcoins per each new block.
Bitcoins Mining Trends
Ever growing bills for electricity caused by the use of powerful
equipment lead to the situation that individual miners working from
their homes are gradually coming to extinction. Instead, biotin mining
pools and bitcoin farms came to life to replace them. Pools consist of
thousands miners, each one get the profit proportional to his/her
personal contribution into a common success. Such mining method will
you income more often, but in smaller bits. The world’s largest pool is
located in Hong Kong and it produces only 26 bitcoins per day, which is
a bit more than ten thousand US dollars, as per the current exchange
Based on the fact that the number of individual miners is falling, a
researcher Sebastiaan Deetman presented two possible scenarios of
bitcoin mining for 2020 with regard to energy consumption, one of them
is a pessimistic forecast and another one is optimistic.
According to scientists, a pessimistic scenario is more probable:
hashrate growth, together with reward shrinking, will lead to the
situation when total electricity demand of bitcoin network will
actually be comparable with electricity consumption of entire Denmark.
The fears of Leiden University researcher were shared by Gay Lane, a
chairman of Australian Long Future Foundation. He thinks that if a
bitcoin cost will rise to one million US dollars the cryptocurrency
production will demand 60% of total world electricity demand. Lane
believes that majority of the people will be just sitting in darkness.
According to the optimistic scenario electronic giants will be able
to develop energy efficient devices and technical progress will be
proportional to the growth of resources spent on mining. Even now multi
corporations are busy seeking for solutions. At the end of 2015 BitFury
and Bitmain companies informed about thier project aimed to develop a
unique mining chip which would require three times less energy than a
Even if the energy consumption of bitcoin production is very high,
bitcoin still has numerous advantages. Bitcoin is the first alternative
to existing financial environment and anybody can get it. It would be a
mistake to think that only bitcoin production demands more and more
energy: manufacturers of all modern gadgets take part in this arms race
and bring to the market more and more powerful devices. So slowdown of
Bitcoin production growth will not be a solution. To resolve the
problem we need to create smart energy systems. Currently a number of
start-ups are already experimenting with intellectual energy metering