Have the lights in your neighborhood been dimming from time to time recently? Maybe you’ve got a bitcoin “miner” next door! A bitcoin miner is one who produces a new bitcoin by applying immense computing power – requiring immense amounts of electricity - to the algorithms and formulas necessary to properly produce the digital entity that is bitcoin. The miner is then rewarded with…bitcoins.
The University of Cambridge’s Centre for Alternative Finance keeps track of just how much energy the Bitcoin network of miners consumes. While the exact amount cannot be known due to the wide variety of equipment employed in bitcoin mining, the Centre says that an educated guess can be produced by tracking the total number of hashes (a building block of bitcoin) produced by the miners and estimating the efficiency of the equipment employed in the production. By this estimation, bitcoin mining activity’s power consumption is staggering - about 92.8 terawatt hours annualized. This is more than the entire nation of Pakistan’s power consumption in 2016, and is heading toward the annual power consumption of the Netherlands! Interestingly, two-thirds of bitcoin mining takes place in China, where most electricity is produced by coal-burning power plants – so although the currency might be virtual, its negative effect on the production of greenhouse gases is most certainly very real. (chart from the Cambridge Centre for Alternative Finance)
