The value of Bitcoin has fluctuated widely since the pioneering cryptocurrency’s debut in 2009. Middling at less than $20 for much of its early tenure, Bitcoin soared to an all-time high of $979.45 in December 2013 before fluctuating approximately between $200 and $400 over the past year. However, Bitcoin’s true costs are hidden in this traditional market valuation. In order to obtain Bitcoins, one must “mine” them using a computer rig, and these high-performance computers have high energy needs. One analysis of the cryptocurrency projects that by 2020, global Bitcoin mining could consume as much electricity as the entire country of Denmark.
Bitcoin is a peer-to-peer currency that can be transferred between individuals without a governing body or bank acting as intermediary. A program incorporates the value and present circulation of coins to steadily generate new Bitcoins. As the currency has aged, the mining of new Bitcoins has grown more energy intensive. The current extraction rate of Bitcoins uses approximately 350 megawatts, enough to power 280,000 American homes. Current Bitcoin demand also requires a mining network infrastructure that weighs over 10,000 metric tons.
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Environmental researcher and Bitcoin enthusiast Sebastian Deetman has explored the future growth of Bitcoin and how it might affect future energy use. He said, “The results show that in an optimistic scenario, the increase in electricity consumption of the bitcoin network compared to now is not shocking, from around 350 MW to around 417 MW, but still on the order of one small power station.” If his pessimistic projections hold true, the difference in power use would be drastic. “Even in the optimistic scenario, just mining one bitcoin in 2020 would require a shocking 5,500 kWh, or about half the annual electricity consumption of an American household,” says Deetman. “I haven’t given up on the idea of distributed network transactions, but a radical rethinking of how these may be secured would be beneficial, be it at least for the environment.” Solar-powered Bitcoin farm: a worthy investment?
Via Vice Motherboard
Images via Zach Copley/Flickr and Mirko Tobias Schäfer/Flickr
