Topic: [2017-11-05] Each Bitcoin Transaction Uses As Much Energy As Your House In A Wee (Read 1556 times)

An environmentalist looking at these figures would be shaking his head in disbelief. However, since this is all about making money sometimes we just closed our eyes to the truth and just wish that there would be people or a group of business who would take the challenge of lessening the power requirement for Bitcoin mining. The challenge is to come up with mining equipment that can run with less power and still be very profitable. Of course, am sure that this idea has already been tackled before and there are now people who are experimenting to come up with what the situation is demanding.

Mining in places like Iceland or Siberia can proved to be a good alternative as these places are known to have cheaper energy sources and they can in turn use the heat generated to warm their houses...just like killing two birds just using one stone. Now, the market is waiting for those who can produce better alternatives...am sure these are companies now doing the work necessary so they can be the first to introduce "greener" mining rigs.

As we are now in the age where being "green" or environmentally conscious is the "in" thing, the one who can come up with better alternatives would have a hard time keeping up with the demand.

While Bitcoin bulls will probably never have it so good as they have in 2017, we wonder whether many of them have stopped to think about the environmental downside of this roaring bull market. After all, back in the dot.com boom, people had ideas about potential internet businesses, issued pieces of paper representing ownership and watched their prices go parabolic parabolic. All it took was a Powerpoint presentation, some computer programming expertise and a “research” report, courtesy of Mary Meeker, Henry Blodgett et al.

The environmental downside we’re referring to in Bitcoin is, of course, is energy.

We alluded to this in a constructive way here when we noted that a new Bitcoin mining hub is developing in Iceland, where the natural temperature dramatically reduces the cost of cooling computing hardware.

The primary energy requirement, however, goes into the computing power to “mine” the Bitcoins. The Bitcoin mining industry can consume 24 terawatt hours of electricity and still be profitable – the Motherboard website provides some context...  

Bitcoin's incredible price run to break over $7,000 this year has sent its overall electricity consumption soaring, as people worldwide bring more energy-hungry computers online to mine the digital currency. An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins. That's about as much as Nigeria, a country of 186 million people, uses in a year… De Vries also estimates that the worldwide Bitcoin mining industry is now using enough electricity to power 2.26 million American homes.

A rapid “Google” later and we discovered that there are 125.8 million American households, so almost 2%.

Another way of looking at Bitcoin’s energy consumption is divide the electricity use in Bitcoin mining each day by the number of daily Bitcoin transactions. As the Motherboard notes, each Bitcoin transaction now requires the same amount of electricity needed to power the average American household for one week.

Expressing Bitcoin's energy use on a per-transaction basis is a useful abstraction. Bitcoin uses x energy in total, and this energy verifies/secures roughly 300k transactions per day. So this measure shows the value we get for all that electricity, since the verified transaction (and our confidence in it) is ultimately the end product…This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week. Since 2015, Bitcoin's electricity consumption has been very high compared to conventional digital payment methods. This is because the dollar price of Bitcoin is directly proportional to the amount of electricity that can profitably be used to mine it.

Unfortunately for the environmentalists, the Bitcoin price – as every bull knows – entered the parabolic phase in 2017. This Bloomberg chart calculates the number of days for each $1,000 rise in price.

Read more here: http://www.zerohedge.com/news/2017-11-04/each-bitcoin-transaction-uses-much-energy-your-house-week