New study on Bitcoin mining lacks precision

There has been much discussion about the amount of electricity actually used by bitcoin mining. Studies on this subject draw very different conclusions, although they share some similarities. The most recent study states that Bitcoin mining will consume 0.5% of global electricity by the end of the year. This is a somewhat disturbing statistic, even if it is not based on all the facts.

MINING BITCOIN IS A GOURMET INDUSTRY IN ENERGY

Nobody can deny that the use of electricity associated with Bitcoin mining is important. This is not just the case with Bitcoin, as it applies to virtually all cryptocurrency nowadays. Anything that requires heavy computing requires a lot of electricity. Supercomputers are no different in this respect.

Even so, Bitcoin mining attracts a lot of negative attention because of its electricity needs. A new study by a Dutch specialist states that the Bitcoin mining industry will consume up to 0.5% of global electricity by the end of 2018. Although this may seem rather problematic, it is not necessarily a concern major when looking at the situation as a whole.

This study bases its conclusions on the assertion that the current Bitcoin mining ecosystem uses as much electricity as Ireland as a whole. This particular statement has been the subject of much controversy and scrutiny because it is very fact-based and involves calculations that apparently do not match. The use of this study as a basis for further claims regarding the electricity consumption of Bitcoin mining will only lead to further confusion and misinformation.

There is no adequate way to predict how much electricity will be used by the Bitcoin mining industry by the end of 2018. Most of the calculations made in this regard are based on partial information, speculation and some desire to make the image of Bitcoin mining extremely bad. A scientific discussion on this subject seems to make much more sense, but since research is often transformed and conclusions incomplete, the problems only get worse.

In addition, studies such as these tend not to take into account an essential aspect of Bitcoin mining. Indeed, the use of renewable energy must not be neglected by any means. The successful mining of Bitcoin for profit requires the use of the cheapest electricity source possible. Right now, renewable energy fits that demand perfectly. This is partly why so many mining operations are located in areas rich in renewable energy.

How will all this evolve in the future, nobody knows at this stage. The global interest in Bitcoin mining and other cryptocurrencies does not slow down, quite the opposite. In addition, currencies such as Ethereum will move to proof of stake at some point, thus completely removing the mining aspect. These factors are, again, neglected by a study on electricity consumption of Bitcoin mining.

Finally, I just wanted to do a little reminder of the figures between the Bitcoin industry and traditional banks: Bitcoin consumes about 28TW / h in the world, while the only ATMs consume around 13TW / h. To this must be added 26TW / h for servers and 58TW / h for branches. This gives us a total of 97TW / h of overall power consumption for the conventional banking industry against 28TW / h for that of Bitcoin.