Nav: Home

Bitcoin estimated to use half a percent of the world's electric energy by end of 2018

May 16, 2018

Bitcoin's burgeoning electricity demands have attracted almost as much attention as the cryptocurrency's wildly fluctuating value. But estimating exactly how much electricity the Bitcoin network uses, necessary for understanding its impact and implementing policy, remains a challenge. In the first rigorously peer-reviewed article quantifying Bitcoin's energy requirements, a Commentary appearing May 16 in the journal Joule, financial economist and blockchain specialist Alex de Vries uses a new methodology to pinpoint where Bitcoin's electric energy consumption is headed and how soon it might get there.

"We've seen a lot of back-of-the-envelope calculations, but we need more scientific discussion on where this network is headed. Right now, the information available is pretty poor quality overall, so I'm hoping that people will use this paper as a foundation for more research," says de Vries, who works at the Experience Center of PwC in the Netherlands and is the founder of Digiconomist (@DigiEconomist), a blog that aims to better inform cryptocurrency users.

His estimates, based in economics, put the minimum current usage of the Bitcoin network at 2.55 gigawatts, which means it uses almost as much electricity as Ireland. A single transaction uses as much electricity as an average household in the Netherlands uses in a month. By the end of this year, he predicts the network could be using as much as 7.7 gigawatts--as much as Austria and half of a percent of the world's total consumption. "To me, half a percent is already quite shocking. It's an extreme difference compared to the regular financial system, and this increasing electricity demand is definitely not going to help us reach our climate goals," he says. If the price of Bitcoin continues to increase the way some experts have predicted, de Vries believes the network could someday consume 5% of the world's electricity. "That would be quite bad."

Bitcoin is dependent on computers that time-stamp transactions into an ongoing chain to prevent duplicate spending of coins. Computers in the network perform calculations continuously, competing for the chance, once every ten minutes, to be appointed to create the next block of transactions in the chain. The user of the computer that wins is awarded 12.5 new coins--a process known as "mining" Bitcoin. But all the time, even the users that don't win are expending computing power. "You are generating numbers the whole time and the machines you're using for that use electricity. But if you want to get a bigger slice of the pie, you need to increase your computing power. So there's a big incentive for people to increase how much they're spending on electricity and on machines," de Vries says.

It's figuring out when that incentive stops paying off that is at the heart of de Vries's estimation method. Economic principles suggest that the entire Bitcoin network will eventually reach an equilibrium where the costs of the hardware and electricity used to mine equal the value of the Bitcoin being mined. And that information can approximate the total amount of electricity that the network will use at said equilibrium.

Other researchers have used the fundamentals of this method before, but de Vries goes farther. He uses production information about Bitmain, the biggest manufacturer of Bitcoin mining machines, to estimate both how much of a miner's costs are associated with hardware rather than electricity and when this equilibrium might be reached. And while he does have confidence in his estimates, the problem with this method is that these manufacturers are extremely secretive. "Sometimes the best information we've got is really shaky eyewitness accounts. That's the stuff we have to work with," he says.

Still, he believes that getting a good estimate is important in determining the sustainability of cryptocurrencies moving forward and in helping shape policy around them. Some states in the U.S. have already started to put restrictions around Bitcoin mining. "But you need to base your policy on something. And I think that my method is important in that regard, because it's very forward-looking. It's focused not on the now, but on where we're headed. And I think that's something you really need to know if you're going to draft policy about it," he says.

He also points out that there is plenty of room for discussion of his method. "I think everyone agrees on the minimum energy consumption. But the future estimate? That's actually quite debatable. We don't really have a common approach to getting to a future estimate of electricity consumption right now, which is why I am hoping to get this conversation started. I'm doing this research, but a lot of people should be doing it."
-end-
Joule, de Vries: "Bitcoin's Growing Energy Problem" http://www.cell.com/joule/fulltext/S2542-4351(18)30177-6

Joule (@Joule_CP) published monthly by Cell Press, is a new home for outstanding and insightful research, analysis, and ideas addressing the need for more sustainable energy. A sister journal to Cell, Joule spans all scales of energy research, from fundamental laboratory research into energy conversion and storage up to impactful analysis at the global level. Visit: http://www.cell.com/joule. To receive Cell Press media alerts, contact press@cell.com.

Cell Press

Related Electricity Articles:

Microbial fuel cell converts methane to electricity
Transporting methane from gas wellheads to market provides multiple opportunities for this greenhouse gas to leak into the atmosphere.
Exploring the conversion of heat to electricity in single molecules
Researchers at Osaka University investigated the influence of the geometry of single-molecule devices on their ability to produce electricity from heat.
Macrophages conduct electricity, help heart to beat
Macrophages have a previously unrecognized role in helping the mammalian heart beat in rhythm.
Buzzing the brain with electricity can boost working memory
Scientists have uncovered a method for improving short-term working memory, by stimulating the brain with electricity to synchronize brain waves.
Environmentally friendly, almost electricity-free solar cooling
Demand and the need for cooling are growing as the effects of climate change intensify.
1 in 5 residents overuses electricity at neighbors' expense
Household electricity use falls by more than 30 percent when residents are obliged to pay for their own personal consumption.
New approach for matching production and consumption of renewable electricity
VTT Technical Research Centre of Finland is coordinating the BALANCE project, which brings together leading European research institutes in the field of electrochemical conversion.
Electricity costs: A new way they'll surge in a warming world
Climate change is likely to increase US electricity costs over the next century by billions of dollars more than economists previously forecast, according to a new study involving a University of Michigan researcher.
Material can turn sunlight, heat and movement into electricity -- all at once
Many forms of energy surround you: sunlight, the heat in your room and even your own movements.
For this metal, electricity flows, but not the heat
Berkeley scientists have discovered that electrons in vanadium dioxide can conduct electricity without conducting heat, an exotic property in an unconventional material.

Related Electricity Reading:

Delmar's Standard Textbook of Electricity
by Stephen L. Herman (Author)

Basic Electricity (Dover Books on Electrical Engineering)
by Bureau of Naval Personnel (Author)

Schaum's Outline of Basic Electricity, Second Edition (Schaum's Outlines)
by Milton Gussow (Author)

Electricity Demystified, Second Edition
by Stan Gibilisco (Author)

Teach Yourself Electricity and Electronics, Sixth Edition
by Stan Gibilisco (Author), Simon Monk (Author)

Basic Electricity
by U. S. Naval Personnel (Author), The Editors of REA (Author), Engineering Study Guides (Author)

Electricity and Magnetism
by Edward M. Purcell (Author), David J. Morin (Author)

DK Eyewitness Books: Electricity: Discover the story of electricity from the earliest discoveries to the technolog
by Steve Parker (Author)

You Wouldn't Want to Live Without Electricity
by Professor of Cardiovascular Medicine Ian Graham (Author), Rory Walker (Illustrator)

Electricity (Science Readers: Content and Literacy)
by Teacher Created Materials (Author)

Best Science Podcasts 2018

We have hand picked the best science podcasts for 2018. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Hacking The Law
We have a vision of justice as blind, impartial, and fair — but in reality, the law often fails those who need it most. This hour, TED speakers explore radical ways to change the legal system. Guests include lawyer and social justice advocate Robin Steinberg, animal rights lawyer Steven Wise, political activist Brett Hennig, and lawyer and social entrepreneur Vivek Maru.
Now Playing: Science for the People

#495 Earth Science in Space
Some worlds are made of sand. Some are made of water. Some are even made of salt. In science fiction and fantasy, planet can be made of whatever you want. But what does that mean for how the planets themselves work? When in doubt, throw an asteroid at it. This is a live show recorded at the 2018 Dragon Con in Atlanta Georgia. Featuring Travor Valle, Mika McKinnon, David Moscato, Scott Harris, and moderated by our own Bethany Brookshire. Note: The sound isn't as good as we'd hoped but we love the guests and the conversation and we wanted to...