Bitcoin mining: how much does it cost, in terms of energy?


The value of BitCoins, which reached almost 10 thousand dollars (twice as much as in October) is not the only characteristic of the virtual currency to be leavened in 2017. Also the energy used to generate this cryptocurrency (that is the expense for the activities mining) has reached new heights: according to a research conducted by the UK platform for comparing PowerCompare energy tariffs, the average amount of electricity used this year to undermine BitCoin has surpassed the average annual energy consumption of 159 nations, and in particular those of Ireland and most African states.

Image In orange, nations that boast lower annual energy consumption than BitCoin mining activities. |

Based on the data of the study, provided by Digiconomist, in a year are spent, to undermine (ie generate) BitCoin, 30.14 terawattora (TWh) of electricity. Ireland's average annual energy consumption is just 25. Numbers that make an impression, but that are in line with recent estimates of the average consumption of a single BitCoin transaction, which requires, in energy terms, the equivalent of a family's monthly requirement.

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Onerous calculations. To make the mining activity a black hole, in energy terms, is the computing power necessary to process the complex cryptography that guarantees the security of transactions in BitCoin. Simplifying, every time a new BitCoin is created it is necessary that this is checked, validated and encrypted. And to do this we need to do a series of complex mathematical calculations. The computing power - and therefore also the electricity consumed - is the physical cost for producing BitCoin.

Out of size. The greater the number of BitCoin products and operating mines, the more difficult the proposed calculations and problems become (and the more complex and difficult-to-break BitCoin encryption); and for more complex operations you need more powerful computers.

While up until a few years ago even a good computer was able to produce (undermine) BitCoin, today it is necessary to use thousands of processors: the BitCoin mines are huge server farms where thousands of computers work together. They are found mostly in rural areas of China, where electricity costs less (although, as Quartz recounts, it really needs a lot and the energy costs of a cryptomine mine can reach almost $ 39, 000 a day).

For mining, special processors called ASICs (application-specific integrated circuits) have been developed which, however, suck up exorbitant quantities of energy, and which pose environmental problems: today most of the electricity is produced with fossil fuels. In other words, BitCoins are contributing to global warming.

A possible solution could be to resort to more ecofriendly forms of verification that are not based on computational complexity, but on more sustainable forms of validation.