New Bitcoin Mining Study Reveals That We Don’t Really Know Much About The Real Cost of Mining
An economist called Alex de Vries has recently claimed that Bitcoin mining will account for 0.5% of the world’s spent electricity next year. That is a lot. This information was released in de Vries’ new article called Bitcoin’s Growing Energy Problem.
How Bitcoin Mining Have Scaled Up To This Point
Mining, in case you do not know, happens when computers solve mathematical equations to validate transactions that are made on the Bitcoin blockchain. This way, they power the network for rewards that are paid on Bitcoin.
The equations get more and more complex as more Bitcoins are mined, which means that, unless the price of the Bitcoin gets higher, it will be less profitable to keep mining. This means that only big companies will be able to get money from mining after some time because they have more structure. This way, the amount of electricity used only gets higher.
Alex De Vries And The Bitcoin Mining Study
The study made by de Vries estimates its numbers after following a series of factors. One of them is the proportion of computer operations to accepted validations, which was 8.7 quintillion to one in March 2018, or 26 quintillion/3 approved transactions in a second.
Unfortunately, the method is not able to estimate how much computers are being used or how efficient they will be. The most effective mining machine in the market is the Antminer S9, though, which can lead de Vries to reach a figure of 2.55 gigawatts. For comparison, Ireland uses 3.1 gigawatts.
This estimate uses the best mining device and does not take additional electricity requirements like coolers into account, which means that Bitcoin mining (and Bitcoin alone) spends more energy than Ireland.
There Is Not Enough Data
The main problem of trying to know how much electricity you need is that the information is limited because many companies do not disclose information about their operations. The researcher came up with a number of 7.57 gigawatts in total after taking into account electricity cost, equipment purchase and upkeep.
It gets even worse when you think that this is a very profitable market and that it could spend more energy than the nation of Austria (8.2 gigawatts) until the end of the year if it keeps growing at this trend.
The problem, the researcher affirms, will continue to get worse. How will it be solved? Nobody knows at the moment.