This is a universal truth; bitcoin mining consumes a lot of energy. You may think how much is “a lot”? Well, think of it this way, our own electricity consumption in Pakistan is a lot less than what it takes to mine cryptocurrency around the world.
The price of bitcoin is not the only thing that soared over time as the energy required to mine cryptocurrency has also reached new heights
Looking at the current situation, it might not be wrong to say that in the near future the energy consumption required to mine bitcoin would become too expensive for the cryptocurrency to bear profitability for its holder.
Economist Alex de Vries told Independent that by 2018, bitcoin mining will use 0.5% of the world’s energy. In a recently published articled called “Bitcoin’s Growing Energy Problem,” Vries reveals that currently, bitcoin mining consumes at least 2.55 gigawatts of electricity and in the future, this number will grow to become 7.67 gigawatts in the future which is more than 3.1 gigawatts of energy consumed by Ireland and close to 8.2 gigawatts of energy used by Austria.
Does this come as a shock to you? It certainly shouldn’t as people have been comparing the bitcoin mining’s energy consumption to that of different countries for a long period of time.
Previously, providing more accurate estimates was not possible owing to the secretive nature of bitcoin mining facilities and their hushed operations which not many people were privy to.
Earlier this year, Fortune also reported that bitcoin mining now uses more electricity than all the electric cars in the world and in this year, its power demand is expected to more than triple.
Why Bitcoin Mining Needs Too Much Energy?
Now you might be asking, why does it take so much energy to mine bitcoin? Well, producing each new bitcoin requires a person to solve a complex mathematical puzzle through a cryptic process which is performed by not ordinary but high-powered computers.
The mining computations are used to verify the bitcoin transactions on a blockchain which is a digital ledger that ensures security which is also energy intensive operation.
With this pace of electricity consumption, Bitcoin investors will have to consider energy as a factor of whether the virtual currency provides any profit or not. We can also assume that in the future, bitcoin’s price which is already volatile to different news/events will become vulnerable to energy price fluctuations which can become an even bigger nightmare for investors.