A new study suggests mining Bitcoin (BTC) could end up consuming approximately 7.2 gigawatts of power before this year ends. Science journal, Joule, published the results of the study. The findings say by the end of the year, mining Bitcoin could use up to 0.5% of the world’s electricity. Additionally, ff the value of Bitcoin rises to astronomical prices some experts are suggesting, it could end up consuming around 5% of worldwide electricity.
According to the study’s sole author, Alex de Vries, Bitcoin is currently utilizing around 2.55 gigawatts of power. The senior consultant at PwC’s Experience Center in the Netherlands, estimates that each transaction uses energy equivalent to what an average household uses in an entire month.
The reason Bitcoin uses so much electricity is because it requires the time-stamping of transactions on the blockchain by computers. To avoid the duplicate use of coins, the blockchain employs a method referred to as ‘proof-of-work,’ which requires numerous computers. With Bitcoin mining being a competitive lottery which incentivizes players to keep on adding new computers to the network in order to get more rewards, in this case bitcoins, the power-hungry nature of the cryptocurrency is only likely to get worse especially if it rises in value. 1,800 bitcoins are mined on a daily basis.
This comes in the wake of former Minister of Energy in Romania, Razvan Nicolescu, warnings. He said there are numerous digital currency mining rigs being installed in the country. Furthermore, this could have a huge impact on the energy sector in the eastern European nation. At the moment, Nicolescu is Deloitte Consulting’s energy & resources industry leader.
Careful observation needed
As a result, Nicolescu is urging the country’s authorities to carefully observe what’s happening and avoid lethargy. Some of the concerns that Nicolescu has, with regards to the proliferation of Bitcoin mining in the country, is that it could lead to a big increase in energy consumption. This could have an unknown impact on the economy and also its people as well.
Already, experts have warned that at the current rate of growth, the activity of mining digital currencies could end up using as much electricity as the entire United States by mid 2019. This could have a very negative impact on environments worldwide.