A new study has found that bitcoin will use around 0.5 percent of the world’s total electricity by the end of the year, and currently uses as much power as Ireland does.
According to economist and blockchain specialist Alex de Vries, who works at PwC in the Netherlands, the information available on how much electricity the cryptocurrency uses has been ‘poor,’ adding:
“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.”
As reported by MoneyControl, the minimum current usage of the bitcoin network has been pegged at 2.55 gigawatts, which is almost as much electricity as that of Ireland. de Vries adds that a single transaction consumes as much electricity as an average household in the Netherlands uses in a month. Not only that, but it’s predicted that the bitcoin network could use as much as 7.7 gigawatts of electricity by the end of the year. This is comparable to that used in Austria and half a percent of the world’s total consumption.
de Vries said:
“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.”
Since its inception bitcoin has attracted a lot of attention. Yet, as the years have gone by the amount of electricity needed to mine coins – currently 12.5 for a user with the winning computer – has garnered just as much attention as the currency itself. And understandably so. With climate controls in place and targets set to meet environmental goals it’s no wonder that the amount of power that the digital currency uses is often brought into question.
However, despite the issue of computing power required to mine new bitcoins that doesn’t appear to be having an impact on those involved in the space. As de Vries states if people want a bigger slice of the pie, they need to increase their computing power.
“So there’s a big incentive for people to increase how much they’re spending on electricity and on machines,” he said.
One possible solution is the Lightning Network, which is being touted as the answer to bitcoin’s scaling issues. It could also help with electricity consumption as it involves two parties and because there are no miners that require incentivising.
Featured image from Shutterstock.