Visualizing the Power Consumption of Bitcoin Mining
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Visualizing the Power Consumption of Bitcoin Mining
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, we’ve used data from the University of Cambridge’s Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoin’s power consumption with a variety of countries and companies.
Why Does Bitcoin Mining Require So Much Power?
When people mine bitcoins, what they’re really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a
Editorial | what does this mean?
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.
EBAday 2021: Will 2021 see proactive regulators eschew their reactive reputation? 10 hours ago
2 Spurring a seismic shift in the way financial services operate and are supervised, the pandemic forced regulators to reassess strategy and increasingly adopt new technologies to modernise their processes.
Paul Thomalla, global head of payments at Finastra writes that “regulatory change is firmly on the agenda for 2021 particularly, in the UK, EU, Middle East and Asia.”
Noting the push toward combatting fraud and driving change through real time payments, Thomalla furthers that the European Retail Payments Strategy is core to this moment, aiming to drive innovation in payments systems and the roll-out of instant payments by the end of 2021.
Springtime is coming to the North American cryptocurrency mining industry. With access to robust capital markets, cheap power, a stable political climate and increasing participation of technological innovators, industrial-grade mining operations are burgeoning in the United States and Canada, providing competition to Chinese mining pools that now control more than half of the world’s hashing power.
These new ventures are acutely aware of the need to minimize mining’s carbon footprint. In March, when Neptune Digital Assets and Link Global announced they would develop a new five-megawatt Bitcoin mining facility in Alberta, Canada, for instance, Neptune CEO Cale Moodie cited the “substantial global pressure to develop
Analysis
The debate around the environmental impact of the Bitcoin mining ecosystem is heating up once again as academics have provided a fresh dose of perspective on the subject. In an opinion piece written by Noah Smith, a former assistant finance professor turned columnist, took aim at the Bitcoin (BTC) mining industry in March, suggesting that the constantly growing energy consumption of the network is simply unsustainable. Smithâs belief is that more countries will clamp down on Bitcoin mining as they use more power, given that the increasing price of BTC is always matched by rising hash rates.
While Coin Metrics founder Nic Carter has rebutted some of the points raised in Smithâs column, there still seems to be divided opinion around the amount of energy that Bitcoin mining draws, the sources of this energy and the carbon footprint that the industry has on the planet.