Approximately 0.5% of the global capacity today goes to work bitcoin farms and production of other types of cryptocurrency, which is equivalent to Energouchet small European country, say scientists in an article published in the journal of the Joule.
“A lot of people tried to roughly estimate these figures, but one of my colleagues tried to study the mining of cryptocurrencies from a scientific point of view. For me, even that 0.5% is a very shocking figure. If the price of bitcoin will continue to grow, its share in electricity expenses can easily rise to 5%, which is very bad for the world economy”, — says Alex de Vries (Alex de Vries), economist from the center of the experience of PwC in the Netherlands.
The idea of creation of the block chain — protected databases, each block of which is connected to all other parts of the base and can not be tampered with or altered, appeared for a long time, about 30 years ago. Despite the promise of this idea, his first use of it found relatively recently, in 2008, when it created the first cryptocurrency based on it — bitcoin.
For a long time it were interesting, but useless toy for enthusiasts of the computer world, but in 2013 his popularity as the rate increased sharply, rising from level 2-5 dollars for one bitcoin to the bar in 800-1100 dollars. Later the rate has fallen, but this did not prevent the emergence of many new cryptocurrencies and their penetration into the public consciousness.
Their birth gave rise to a whole stratum of entrepreneurs and financiers dedicated exclusively to trade or mine bitcoins. Initially they “minilist” on common household computers with powerful graphics cards, but now in China and other countries, there is a giant “farm” for the production of cryptocurrencies gathered from specialized chips designed just for this purpose.
The existence of such “bitcoin-plants”, as noted by de Vries, is forcing economists and enthusiasts the IT world to think about how much energy this industry and how its existence affects the world market of electricity.
Doing so is problematic, as mining cryptocurrencies recently became illegal in China and some cities in the United States, and “miners” for obvious reasons rarely talk about what capacity they possess and how they evaluate their costs.
De Vries approached this problem, on the other hand, taking advantage of two things — the increasing difficulty of bitcoin mining and rationality of the miners and producers of chips. It appears that the first will not mine bitcoins at a loss, and the second is to produce devices that will produce more coins than the cost of the chip itself, while the complexity has not increased.
All of these things, according to the economist, are reflected in the cost of devices for the extraction of bitcoin, and how much energy they consume. Using these data, he analyzed how the increased difficulty of mining bitcoins over the past year, and calculated the current global rate of mining, and how much energy it takes now and will be spent in the future.
His calculations showed that the entire network of bitcoin miners generating about 28 quintillion (10 to 18 degree) of hashes every second, which takes a minimum of 2.5 gigawatts of electricity. In the future if the rate of bitcoin will continue to rise after this fall, these figures could rise to the level of 7.67 gigawatts, equivalent to the amount of energy that consumes all of Austria or Ireland. Hopes de Vries, his calculations will help policymakers and economists to find the right approach the regulation of cryptocurrency market in the future.
As previously reported “FACTS” in Ukraine for the first time in judicial practice, the plaintiff estimated his losses in the cryptocurrency.