With Coindesk approximating the number of bitcoin in circulation at 16.8 million and an expected rise in mining activity almost a certainty, there is cause to believe that current technology is not capable of handling such demands.
Bitcoin has dominated headlines over the past few months, with the spectacular rise at the end of 2017 bringing the cryptocurrency firmly into the mainstream since its introduction nine years ago. While bitcoin hit an all-time high of $19,000 in December before collapsing to under $6,000, everyone involved in finance, from money experts to credit reporting agencies, have been forced to stand up and take notice.
Research by Maynooth University in Ireland followed the rise in activity in reference to bitcoin mining and came to the conclusion that the current energy consumption required to create one coin is worrying. From 2009 to 2013, there were 50 bitcoins in circulation. To put today’s figures into perspective, there are now 25% of that figure created every 10 minutes, which is simply astounding. Dr David Malone and Karl O’Dwyer of Maynooth University in Kildare, Ireland, found that the energy requirements in bitcoin mining may pose a big problem for the future.
In 2014, they estimated that anywhere between 0.01 gigawatts to 10 gigawatts could be used to mine bitcoin. The entire nation of Ireland’s energy consumption varied between 2.5 to five gigawatts. Two gigawatts an hour equates to two million units of electricity which would cost almost $370,000 if considered in consumer prices.
Dr Malone (via The Irish Times) asked “whether current levels of bitcoin mining are sustainable, and have any long-term worth to investors and the global economy – especially as bitcoin mining energy usage is now a minimum of two gigawatts, and when overheads such as air conditioning and cooling systems for bitcoin mining facilities are taken into account, this easily becomes 3.5 gigawatts or more.”
“When we originally did our study in 2014, the hash rate was about 300,000TH per second and at the start of 2017 it was more like 2,000,000TH per second – an increase of six to seven times,” Dr Malone said. “In the same period, the best hardware got about five times as energy efficient so a significant fraction of the increase of the increase in hash rate could have been absorbed.
“Now, despite bitcoin’s recent fall in value, the hash rate is over 23,000,000TH per second and there doesn’t seem to have been big hardware advances in efficiency in the last year or so. This would give an estimate of energy consumption that starts at over two gigawatts, with overheads for bitcoin mining operations easily adding another 1.5 gigawatts to this.
Dr Malone also stressed the need for concern when it comes to just how much damage the cryptocurrency could have on efforts to promote sustainable energy:
“When we add the overhead energy consumption, for things like lights for bitcoin mining operations, we can see the energy footprint start to outstrip the usage of entire countries like Ireland.”