Bitcoin ‘mining’ production is energy inefficient
In a bid to cut down on vast energy consuming operations, China is reported to have made plans to ban new cryptocurrency mining projects and shut down existing activity.
It is estimated that one such bitcoin mining operation consumes some 128 terrawatt hours of energy, per year. That’s more than an entire country might use with a population of about 45 million people, such Argentina.
It is also estimated that this single Bitcoin mining site, based in Mongolia, represents 8% of all global bitcoin production. The whole of the U.S. is estimated at 7%. China likely accounts for about 65% of all bitcoin mining worldwide.
Mining
These miners run purpose built computers created to solve complex mathematical ‘puzzles’ that effectively allow a bitcoin transaction to happen. The miners receive bitcoin as a reward and that is the incentive.
Bitcoin is based on a decentralized network, which means it’s not issued by a single entity like a central bank. Transactions are recorded on a public ledger called blockchain, and these then require verification by the miners.
Polluting energy?
By my calculations, if China represents 65% of global bitcoin mining this would equate to some 1040 terrawatt hours of energy used per year and that would in turn suggest that is about the level of energy consumption for some 360 million people or more. This is not an efficient use of energy, especially if the energy is generated from fossil fuels.
In my opinion it is an inefficient use of precious energy – but at least China is attempting to control the polluting waste of bitcoin production. After all, nothing is made or produced. It is a waste of energy and computing power. All it does is pollute.
What is a terrawatt?
One terrawatt = one trillion watts – which roughly equates to about 1.7 trillion light bulbs all illuminated at the same time.
More on this post to follow…