Surely, you’ve heard about Bitcoins . It is a kind of decentralized cryptocurrency, which operates in an online medium. Introduced to the world in 2008, it has been growing exponentially and is now worth millions of reais. The bitcoin market is already over a trillion dollars. And its price goes up tenfold in a year.
However, the focus of this cryptocurrency is shifting to the huge energy requirements that are needed to sustain it. This is because the total energy consumed by the bitcoin mining process can reach 128 terawatt-hours (TWh), according to the Cambridge Bitcoin Electricity Consumption Index ( CBECI ), which is a compiled by researchers at the University of Cambridge. This represents 0.6% of the world’s total electricity production. Which is already more than all of Norway’s consumption.
“These numbers may seem large when compared to medium-sized countries or emerging technologies such as electric vehicles (80 TWh in 2019). But small compared to other end uses like air conditioning and fans,” said George, an analyst at the Kamiya International Energy Agency.
In 2019, the entire Google operation consumed 12.2 TWh. And all data centers in the world, except those that exploit bitcoin , together consume approximately 200 TWh per year.
According to economist Alex de Vries, who was one of the first indices on this subject, the view is still pessimistic. He believes that the recent rise in the price of bitcoin will intensify its use. And with that, it will increase energy consumption that will surpass that of all data centers combined.
Because so much energy
With the promise of a huge reward for those who “mined” bitcoins, the increase of giant data centers dedicated only to cryptocurrency was fueled.
So-called “miners” solve deliberately complicated equations through the processing power of brute force under the so-called proof-of-work protocol.
This protocol is designed to maintain network integrity and ensure a stable supply of currency. This makes the calculations harder when a lot of people are mining, and easier when the number is smaller.
The system is designed so that, every 10 minutes, the network gives out some bitcoin to people who have successfully solved the puzzle.
“If you have new, more efficient machines, you’re going to use more machines to gain a bigger share of the mining market,” said Michel Rauchs, who led the team that created CBECI.
Because the price of bitcoin is very high and rising more and more miners are operating at full capacity.
According to bitcoin proponents, the rapid development of renewable energy in the power plant sectors means that cryptocurrency ends up having a moderate effect on the environment.
However, researchers at the University of New Mexico estimated in 2019 that prior to this recent price increase, every dollar of value created by bitcoin caused 49 cents of damage to health and the environment in the US.
But bitcoin does this more difficult. Because it would risk making it less decentralized and secure.