Does Bitcoin energy consumption scale with its usage?

Does Bitcoin energy consumption scale with its usage?

Although bitcoins exist only in digital zeros and digital zeros, the computers that manage the network are huge energy resources. The growing use of Bitcoin raises fears that energy-absorbing equipment and data centers (as well as associated cooling and lighting) will make it even harder to combat global warming. We estimate that the exploitation of Bitcoin consumed about 45 terawatt hours (TWh) last year. To give some idea of ​​the scale, we estimate that global demand for electricity has also increased by 900 TWh last year. Much of the mining is in countries with a lot of renewable electricity or in areas of China rich in renewable energy. In 2018, bitcoin mining is probably responsible for 10 to 20 Mt of CO2 per year, or 0.03 to 0.06% of global CO2 emissions related to energy. While these early estimates provide a rough indication of bitcoin energy use today, it is clear that researchers need more data, particularly from mining facilities, to develop more rigorous methodologies and more accurate estimates.

The energy consumption of the miners increases or decreases according to the competition between the minors, and not the number of transactions being validated. Digital Signature Validation uses a tiny amount of computing power. Why does so much competition generate so much energy? Economy. Bitcoins are expensive right now, and every 10 minutes a minor will have 12.5 brand new ones. This competition is healthy because it means that the efforts devoted to securing the network automatically adapt to the value of the transaction data stored in the blockchain. Thus, the more the Bitcoin network is profitable, because the more the customer values ​​it, the higher its budget, the more resources will be devoted to its security. This contrasts sharply with secure data, for example, from Equifax or any other Big Data company where data security efforts are tailored to the risk assessment and fear of liability on the part of Equifax. of a management team. This can become less fierce over time. The reward for new bitcoins is halved every four years, until it actually reaches zero. Miners will continue to work because they can also collect fees that network users add to their transaction messages, but the total payment at home for a winning minor will likely be lower than it is today, even if the price of a Bitcoin continues to increase. . Lesser rewards mean less computing power dedicated to victory and less electricity consumed. A Bitcoin transaction is settled as soon as it appears in the blockchain (but wait about an hour for sufficient security). And he never goes through clumsy analog institutions. The miner who put it in a block probably used a lot of electricity, that’s true, but that is much less than the energy it takes for no less than three Fortune 500 financial companies to operate at full speed for a few days.

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