Contents
A comprehensive guide to How Much Energy Does Crypto Mining Use?, including a look at the environmental impact of Bitcoin mining.
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Introduction
Crypto mining is often touted as a green way to offset energy consumption. After all, crypto mining is a process where resources are used to create new units of digital currencies like Bitcoin. But how much energy does crypto mining actually use?
The answer isn’t simple, as crypto mining energy consumption can vary greatly depending on the type of cryptocurrency being mined, the efficiency of the miners being used, and other factors.
That said, a recent estimate from the University of Cambridge suggested that Bitcoin mining alone could consume as much energy as the entire country of Denmark by 2020. If that estimate is accurate, then crypto mining would be responsible for roughly 0.21% of the world’s total electricity consumption.
Of course, not all cryptocurrencies are created equal when it comes to energy consumption. For example, Ethereum miners have been known to use more than twice as much electricity as Bitcoin miners. And while some altcoins can be mined more efficiently than Bitcoin, they still tend to use more energy overall.
So while it’s impossible to say exactly how much energy crypto mining uses without knowing more about the specific cryptocurrency being mined, it’s safe to say that it requires a significant amount of electricity. And with cryptocurrency prices remaining highly volatile, it’s unclear whether or not crypto mining will remain profitable in the long run.
The energy used by Bitcoin
Bitcoin’s price has risen sharply in recent months, and so has the energy used to mine the cryptocurrency.
According to research by CoinShares, the electricity used to mine bitcoin this year could power all the electric vehicles in the world twice over.
The research estimates that bitcoin mining will consume more than 140 terawatt-hours (TWh) of electricity in 2020, compared to 125 TWh for electric vehicles.
Bitcoin’s energy use has been a controversial topic for years. Some have argued that it is a huge waste of electricity, while others believe that it is no different than other energy-intensive industries such as gold mining.
Regardless of where you stand on the issue, there is no denying that bitcoin mining uses a lot of energy. So how much exactly?
In order to answer this question, we need to first understand how bitcoin mining works.
The energy used by Ethereum
Ethereum, the second-largest cryptocurrency by market value, is projected to use more energy than Chile does by the end of the year, according to a recent estimate.
Digital currency mines require vast amounts of energy to solve math problems that verify transactions on blockchain networks such as Ethereum. The process is called “Proof-of-Work” and it’s how miners are rewarded with cryptocurrency.
The Ethereum network is currently using about as much energy as the country of Colombia, according to estimates from Digiconomist, a website that tracks the energy use of digital currencies. By the end of 2018, it’s projected to use more energy than Chile.
Ethereum isn’t alone in its growing energy appetite. Bitcoin, the original and still the largest cryptocurrency by market value, is also estimated to use more than enough electricity to power countries like Bahrain and Honduras.
The energy used by other cryptocurrencies
The most recent estimate of the power used to mine all cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Monero, is around 10 TWh per year. That’s about as much energy as New Zealand uses in a year. The estimates for Bitcoin alone range between 25 and 50 TWh per year – more than the annual energy consumption of some countries
According to Alex de Vries, a cryptocurrency analyst who runs the website Digiconomist, Bitcoin mining could use up to 0.5% of the world’s total electricity by the end of 2018. That would be more than the annual electricity consumption of the Netherlands or Argentina.
Ethereum is the second most popular cryptocurrency after Bitcoin, and its miners are using almost as much electricity as those mining Bitcoin. In September 2018, Ethereum miners were using around 7 TWh of electricity per year – about the same as Bulgaria.
Litecoin is another cryptocurrency that uses Proof-of-Work mining. Its miners were using around 3 TWh of electricity in September 2018 – about the same as Iceland.
Monero is a cryptocurrency that uses a different mining algorithm called Cryptonight. This algorithm is designed to be ASIC-resistant, which means that it can only be profitably mined with CPUs and GPUs rather than specialized mining equipment. As a result, Monero’s power consumption is relatively low at around 1 TWh per year in September 2018.
The environmental impact of cryptocurrency mining
Cryptocurrency mining is an energy-intensive process that often requires specialized hardware. In addition to the electricity used to power the hardware, the cooling systems needed to keep the hardware running can also be a significant energy draw.
The environmental impact of cryptocurrency mining can be significant. In 2018, it was estimated that crypto mining used more than 3% of all global electricity production – and this number is only expected to increase in the years to come.
There are a number of factors that contribute to the high energy usage of cryptocurrency mining, including:
-The need for specialized hardware: Cryptocurrency mining requires specialized hardware that is often not used for any other purpose. This means that there is often a limited market for this type of hardware, which can drive up prices.
-The need for 24/7 operation: Cryptocurrency mines need to be operational 24 hours a day, 7 days a week in order to maximize profits. This constant demand for electricity can put a strain on local energy resources.
-The need for cooling: In order to keep the specialized hardware running at peak efficiency, miners often need to use additional cooling systems – which can also be energy intensive.
Conclusion
Crypto mining is a large and growing industry that uses a significant amount of energy. It is not currently regulated, which means that there is no agreed-upon standard for how much energy it should use. This can lead to different estimates of its energy use, depending on who is doing the estimating.
The crypto mining industry is aware of its energy use and is working on ways to reduce it. For example, some companies are working on more efficient mining hardware and others are looking into using renewable energy sources.
As the industry grows, it is likely that more effort will be put into reducing the energy use of crypto mining.
