Bitcoin and other electronic currencies use items - virtual coins - obtained by solving numerical puzzles using computers. In order to keep the rate of creation of new coins constant as more participants attempt to create them the difficulty of the puzzles, and the amount of computing effort required to solve them, increases. The amount of electrical power used by participating computers is a significant proportion of global energy consumption - in the tens of TWh per year - equal to that of many countries.
Bitcoin Energy Consumption Index Digiconomist
- Ever since its inception Bitcoin’s trust-minimizing consensus has been enabled by its proof-of-work algorithm. The machines performing the “work” are consuming huge amounts of energy while doing so. The Bitcoin Energy Consumption Index was created to provide insight into this amount, and raise awareness on the unsustainability of the proof-of-work algorithm.
Rebuttal to Digiconomist comparison between Bitcoin and Visa:
The Bitcoin vs Visa Electricity Consumption Fallacy Carlos Domingo; Hackernoon; 30 Nov 2017
- Bitcoin is not simply a piece of a payment network like VISA but a full currency system, VISA itself requires the banking system for its payment system to work so you need to actually include some of those costs there to make a meaningful comparison.
Ethereum Energy Consumption Index Digiconomist
- Ethereum has plans to change its proof-of-work algorithm to an energy efficient proof-of-stake algorithm called Casper. This change would minimize energy consumption and will be implemented gradually according to the latest roadmap. For now, Ethereum is still running on proof-of-work completely.
Bitcoin could cost us our clean-energy future Eric Holthaus; Grist; 5 Dec 2017
Bitcoin’s energy usage is huge – we can't afford to ignore it Alex Hern; The Guardian; 17 Jan 2018
- Bitcoin’s electricity usage is enormous. In November, the power consumed by the entire bitcoin network was estimated to be higher than that of the Republic of Ireland. Since then, its demands have only grown. It’s now on pace to use just over 42TWh of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru, according to estimates from Digiconomist. That’s commensurate with CO2 emissions of 20 megatonnes – or roughly 1m transatlantic flights.
- That fact should be a grave notion to anyone who hopes for the cryptocurrency to grow further in stature and enter widespread usage. But even more alarming is that things could get much, much worse, helping to increase climate change in the process.