Mining for cryptocurrency currently consumes more energy than the entire country of Sweden, which consumes only 130 TWh compared to Bitcoin’s 150 TWh.
The value of cryptocurrency has been surging in recent years due to increased mining and trading.
The decentralized network allows consumers the ability to trade without relying on traditional banking.
Mining is the process by which transactions on the blockchain are verified. In order to verify new transactions, mining computers must race to solve an extremely complex computational math problem. This helps to prevent hackers and others from abusing the system.
In order for computers to solve these math problems, a tremendous amount of energy is required. Once a Bitcoin miner solves the problem, they’re rewarded with a transaction fee and newly minted bitcoins.
It’s like getting a cookie for doing your homework except that cookie is now worth US$55,000.
Exactly how much energy does Bitcoin consume?
The University of Cambridge measures the estimated amount of current energy consumption required at around 150 terawatt-hours (TWh) a year.
A terawatt-hour is a unit of energy equal to outputting one trillion watts for one hour. For visualization, that’s a whopping 100 billion standard house light bulbs.
This value is large enough to express annual electricity generation for entire countries and is often used when describing major energy production or consumption.
According to the data provided by Cambridge, mining for cryptocurrency currently consumes more energy than the entire country of Sweden, which consumes only 130 TWh compared to Bitcoin’s 150 TWh.
In addition, the amount of energy currently being used is only increasing as more miners start working on the blockchain.
How does this affect the environment?
No matter what the energy source is, anything that uses a significant amount of energy, like blockchain mining, has a negative impact on the environment unless it is operating purely off of clean energy resources.
However, nonrenewable sources such as oil, natural gases and coal currently make up 85% of worldwide energy usage.
With China accounting for around 65% of total Bitcoin mining, the network is currently costing the country about 90 TWh a year in energy consumption.
While this only accounts for .014% of China’s total energy consumption, it still measures more energy withdrawal than a large majority of small countries.
What’s being done about this?
The problem doesn’t lie entirely with Bitcoin mining. While mining does consume a large amount of energy, the problem primarily lies in how that energy is obtained.
Countries such as China and the US have agreed to decrease carbon outputs and place a greater focus on clean energy which should decrease the environmental impact of crypto mining.
While crypto is facing criticism for providing an avenue for criminals to exchange funds privately, some believe the network has its benefits as well, such as economic security.
Speaking directly to TMS, Rob Zel, founder of bitni.com, said that “even with the most efficient hardware, Bitcoin uses 10 gigawatts. That is the equivalent of 10 large nuclear power stations. This is a lot of energy, although perhaps justified considering the incredible economic security crypto provides.”
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