Power consumption is one of the major costs of bitcoin mining, as dedicated machines process algorithms to create the next block and are rewarded with tiny bits of bitcoin. As mining becomes more difficult, more and more powerful equipment is needed to be competitive. As the value of the digital currency increases – and it soared in 2017 – miners are more likely to invest in more equipment. In 2009, you could operate your desktop computer competitively, but you now need specialized hardware, such as the Antminer S15, a dedicated six-kilogram mining platform costing well over US$1,000 before even starting to think about the electricity bill. This evolution, as well as the worldwide spread of miners, makes it difficult to accurately estimate the amount of energy spent on mining operations that underpin Bitcoin. We know a little bit about how difficult it is to solve the proof of work, how much energy is used by various mining units, how much revenue miners earn, and how much energy is used around the world as a useful peak. By using these pieces of the puzzle, we can attempt to fill the rest.
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