Bitcoin mining energy usage has captured attention of the media. The process has raised concerns that the amount of energy used equals the energy consumption index of more than 160 developing countries. The estimated energy consumption by Bitcoin groups is at 29 TWh, which is the equivalent of energy consumed by Ireland. The industry that comprises a handful of the world’s population has restricted market entrance due to the cost of the level of power required to drive mining processors.
A report by Digieconomics blog has that renewable energy from hydropower is the primary source that fuels the bitcoin mining industry. It was evident that most electricity remains unused due to high costs and the idea of an industry that makes millions out of power is utterly fascinating.
Reason for high energy consumption
Technology experts have cited mining traffic as the primary reason why mining has become very difficult. Back when the Satoshi Nakamoto invented the cryptocurrency, one could mine Bitcoins just from their laptop using a minimum of only 4GB RAM. One could mine several hundreds of Bitcoins back then with just an average CPU. More crowding into the Blockchain resulted in a challenging proof of work algorithm. Without sufficient super powerful graphics cards, one cannot succeed in mining. Pioneering Bitcoin miners have now resorted to other profitable cryptocurrency like Monero and Ethereum.
There have been speculations that Bitcoin is not worth anymore given the levels of consumed energy. It is hard to shadow the allegations given the dropping financial strength of BTC in 2018. At the start of 2018, a Bitcoin was worth $15,000, today the rate is $6,500, which to some extent proves the speculations. Cryptocurrency enthusiasts, however, claim global financial institutions have been discouraging people from the coin as well as alleging of price manipulations.
Today it is difficult to compensate ones electricity usage with Bitcoin mining revenue. Investors are also being discouraged from locking away their Bitcoins awaiting price rises. The current situation associated with powerful mining hardware is likely to crush the industry to its knees. Future re-designing this hardware and creation of sustainable energy could perhaps improve the bids. There is a need to, therefore, speculate on the industry before making a move.