The Energy to Sustain Blockchain – The debate rages on as the energy consumption increases
Guest essay by Shea Karssing
Earlier this year, we published an article (https://smarterbusiness.co.uk/bitcoin-electricity-energy-sustain-blockchain/) on Bitcoin energy consumption, reporting how Iceland has become one of the top locations for cryptocurrency servers, which now exceed the consumption of private energy users.
Now, the criticism amongst ecological circles and the debates around Bitcoin energy consumption have been fueled by a paper by Alex de Vries of PwC’s Experience Center in Amsterdam.
His paper, Bitcoin’s Growing Energy Problem, concludes that Bitcoin’s energy consumption could soon be heading above a consumption rate of 8 gigawatts (GW) per year.
The paper’s findings:
- At the moment, the Bitcoin network consumes at least 2.55 GW of electricity – as high
as the annual energy consumption of Ireland. - This could reach a consumption of 7.67 GW in the future – close to the energy
consumption of the entire nation of Austria (8.2 GW). - By the end of 2018, the mining of bitcoin could be using as much as 0.005% of the
entire world’s energy use.
The reality is that Bitcoin uses a massive amount of energy. Author Alex de Vries says: “The bitcoin development community is experimenting with solutions such as the Lightning Network to improve the throughput of the network, which may alleviate the situation. For now, however, Bitcoin has a big problem and it is growing fast.”
Why does bitcoin mining require so much energy?
The bitcoin mining process uses computers with software that can solve complex mathematical problems. A new block is added to the blockchain every time a new problem is solved, rewarding the miner with bitcoins. This process requires a lot of energy because the computers need to ledger all the transactions so that the same coins aren’t spent twice – this takes time and consumes a lot of electricity.
How can bitcoin mining become sustainable?
De Vries’ research reveals that if the price of bitcoin continues to go down, and the amount of energy needed to mine it continues to rise, bitcoin investment could become inefficient. One of the ways this can be avoided is if the world shifts to 100% renewable energy in the years ahead. With renewables, the environmental and efficiency concerns around bitcoin energy usage would be negated.
New research from Renewable and Sustainable Energy Reviews journal found that a shift to total renewable energy using contemporary technology is both possible and affordable.Co-author of the research, Brian Vad Mathiesen of Aalborg University says: “There are some persistent myths that 100 percent renewable systems are not possible. Our contribution deals with these myths one-by-one, using all the latest research. Now let’s get back to the business of modelling low-cost scenarios to eliminate fossil fuels from our energy system, so we can tackle the climate and health challenges they pose.”
If we were to eliminate fossil fuel usage, this would eliminate the environmental and efficiency challenges caused by energy-intensive bitcoin mining.
It’s not impossible to imagine a world in which bitcoin is used exclusively, backed by green energy. If there’s one thing we’ve learnt over time, it’s to ‘never say never’…
About the author:
Shea Karssing is a writer for Smarter Business, one of the UK’s leading independent consultancies, helping businesses secure the most comprehensive savings solutions from utilities contract management and procurement to business loans and facilities maintenance. Smarter Business are experts on all things energy, and it’s the company’s mission to provide
whole-of-market business comparisons, maximise savings and improve profitability for its clients. https://smarterbusiness.co.uk/
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It’s April Fool’s Day in August – wahoo!!
Bitcoin production is now using Cheap Norwegian Hydropower in several locations in Norway. Some of the producers are oligarks from China, who are probably whitewashing dirty money. One such plant is using the equivalent power of Mandal town, in southern Norway. Why the h… are we putting up windmills on every other mountain top in Norway (also with foreign money), to fuel these guys and this type of rotten NONSUSTAINABLE ‘industry’….?
I think you know the answer to that…..
Am I the only one who finds the entire Bitcoin concept ridiculous?
I mean, it seems you could develop a similar system for coining currency where the test is blowing smoke rings out of your butt – although that might be more difficult to verify than the current bitcoin scheme.
This bitcoin scheme provides no added value to society – it just consumes a lot of time and a lot of electricity, and thus appears to have a negative social value.
As a Professional Engineer, my life objective is to provide real value to society, for example, by:
– initiating concepts that lead to the economic development of practical, sensible energy systems, the rational investment of capital and the creation of good, high-paying jobs
– providing informed guidance on energy policy, and calling out phony global warming, climate change and green energy scams
– saving lives by “blowing the whistle” on major dangers to public safety.
I have been successful in these endeavours, to a significant degree.
When I look at schemes like bitcoin, and I am no expert in the bitcoin game, all I see is nonsense – and in the past when I see nonsense, it usually blows up into nothingness sooner or later.
Am I calling BS on bitcoin and similar schemes? Probably.
The only excuse I see for bitcoin etc is that organizations like the Federal Reserve are equally if not more irresponsible, when it comes to printing money out of thin air.
https://fred.stlouisfed.org/series/BASE/
So maybe bitcoin is no worse than the Fed – well, that’s not saying much (and one should never bet against the Fed).
Regards, Allan
I also see bitcoin is one auto deflationary coin as its own existence requires energy consumption.
Bit-volivares would i call them
Bitcoin? I can see the emperor’s nether cheeks.
My father used to jeer at me for time spent on my then-hobby to experiment with algorithms that used bit-shuffling, Golay code, modulo arithmetic and the products of primes… in an empirical effort to ‘crack’ the factoring problem. My approach was unenlightened… but so was his criticism.
Imagine his surprise when I tell him that a significant amount of energy is now being devoted to the computational equivalent of sorting through a garbage landfill looking for small green round objects, to no useful mathematical end. He’ll be stupefied.
Was checking out Bitcoin and was surprised to find there are over 1000 crytocurrencies out there, according to several sources. Learn something new everyday……
Gigawatts are a unit of power, not energy. You would think that even reporters would have taken a little science in high school or college, but it appears that it did not stick.
“With renewables, the environmental and efficiency concerns around bitcoin energy usage would be negated.”
That’s some serious dumbassery right there. Renewable = very limited and very expensive, not unlimited and free.
It seems that the author doesn’t quite get economics. If there are limited resources, regardless of whether or not they are green, an energy hog such as bitcoin will be a problem. The utopia is born with unlimited resources — a la Star Trek. And of course in Star Trek they didn’t have money — what an antiquated concept!
As for bitcoin itself, just because there is no government doesn’t mean that there is no regulation. There is nothing that ties bitcoin to any real world resource, and thus there is nothing to distinguish it from any other coin out there. The bit coin algorithms are all open source, and “PizzaCoin” and “CareBearCoin” have just as much validity. In a closed system such as a college campus each may work. Bitcoin is literally the king on the block simply because it was first on the block. When it gets tied to a government or to a campus, it will be regulated as being a currency or special privilege token or whatever.
The amount of bitcoin available is an arbitrary number — it will reach a theoretical max for the simple fact that the rewards for having people verify network transactions (mining) will reach a max.. also an arbitrary decision.
Bitcoin removes the central.. cop.. by distributing the transaction verification workload to its miners, who get rewarded in bitcoin. So right now, the network pays its maintainers. That will only last until the last bitcoin is “mined”. Then real payments by real companies to real people are going to be needed.. Or somehow everyone will need to agree on the next generation algorithm.
Meanwhile, bitcoin transactions are *not* anonymous.. Or more specifically, its operations happen on the “account” level. So if someone has your account information, they can track your transactions. But at least the accounts are not tied directly to you — you can hand your ‘wallet’ off to anyone and they’ll take over the account. So sure, there is nothing on the network that directly ties you to the transaction. However just like an ISP can determine which person sent which anonymous email by who’s router had the IP at that moment, a party can track you down if they know that you used a specific account to make a transaction happen. And unlike a bag of dollar bills that can change hands in an alley, your transfer of bitcoins from one personal account to another is recorded by the entire network for anyone to track if they want to.
My 2c. And why I don’t own any bitcoin.