Twitter Users Compare The Cost of Energy For Bitcoin Mining and Growing Weed
It is no secret that Bitcoin mining takes a lot of energy to be made. Because of this, miners are looking for the cheapest sources of energy and the city of Plattsburgh, in New York State has even banned new Bitcoin miners from acting in the city. The local police have even followed energy spikes and discovered apartments full of Bitcoin mining rigs.
In the not too distant future, cops will be showing up with warrants at suspected bitcoin mines, only to find legitimate cannabis growing operations https://t.co/HL2lHa9S2V
— Ben Torkington (@bentorkington) May 28, 2018
The case has lead people on Twitter to talk about a “not too distant future” in which Cannabis is completely legal in the US and the cops will show up with warrants to arrested Bitcoin miners and will only find legitimate Cannabis growing operations there.
This tweet was in reference to a Seattle Times article talking about Utility workers finding empty apartments full of mining rigs.
bitcoiners: "utility crews responding to unusual spikes in power usage have found racks of remotely controlled servers in empty apartments. When they began shutting off these 'rogue operators' earlier this year, some became belligerent" https://t.co/aJlrOIotA7
— David Gerard (@davidgerard) May 27, 2018
Does Growing Weed Spend As Much Energy As Cannabis?
To know if these tweets have any real truth to them, one has to compare the costs of these two different operations. To make this, we will consider the cost of the electricity of the New York area to be 19.8 cents of USD per KWh for our calculations.
A 2014 report made by the Northwest Power and Conservation Council, states that the major costs of growing weed are electrical (38%) and air conditioning (21%). If you use the report as a basis, you will see that Cannabis production can consume 4,000 to 6,000 KWh for a kilogram of weed.
Using the statistics and price for the New York region, using 5,000 KWh will cost 1,000 USD. The price of a whole kilogram of weed is $12,000, which could amount to somewhat like 2 BTC (which the price has been varying between 14-15,000 USD recently).
Alex de Vries has recently made an estimate that Bitcoin miners use 32 terawatt hours annually, which, if you assume that about one block is mined at every ten minutes, makes up for a total of 52,560 blocks in a single year.
If you divide the blocks per the energy cost, you get the figure of 608,828 KWh for every block that is solved. A single block generates 12.5 Bitcoins, so if you divide them, you will see that two Bitcoins use 100,000 KWh of electricity, which would cost $19,000 USD.
This means that mining, even if you use the conservative estimates of De Vries, would not really be profitable in New York at all. To be profitable, it would have to use industrial rates (about 2 cents) which would cost $2,000, a profit of at least $12,000 USD when weed would spend a lot less energy and still make $11,000 profit. If you are going to mine Bitcoins, don’t do in New York.