Cryptocurrencies such as Bitcoin have their proponents, and they also have their staunch critics. Both will often point to issues such as the decentralised nature and the anonymity of transactions as positives and negatives depending on which side of the fence they’re standing on.
One factor that is difficult to put a positive spin on, however, is the energy requirements used to ‘mine’ cryptocurrencies.
Now, researchers at the University of Cambridge have created a tool that can be used to compare the power usage of Bitcoin’s global presence with that of other entities. It currently estimates that the world’s leading cryptocurrency requires around seven gigawatts of energy, which is equal to 0.21% of the world’s energy supply or seven times the electricity generated by the Dungeness nuclear power plant in Kent.
Taken over the course of a year, this is equivalent to the power used by the whole of Switzerland.
Michel Rauchs, the tool’s co-creator, explained: ‘We want to use comparisons that set the narrative. Visitors to the website can make up their own mind as to whether it seems large or small.’
The main energy use comes from Bitcoin mining
The energy usage is tied to the way that cryptocurrencies are mined. It’s a complicated process, but essentially, computers are used to solve incredibly complex computational math problems. These are so difficult that it wouldn’t be practical to use a single even relatively high-spec home PC. High-powered computers are generally used, and they are often connected in mining networks. These sometimes involve entire warehouses of high-powered computers working 24 hours a day on the problem.
When you add all the miners all over the world, this accounts for a lot of energy usage.
Bitcoin expert Alex de Vries, from accountants PwC, built a different tool for monitoring Bitcoin’s energy use last year. He told the BBC that the cryptocurrency used a lot of energy considering the relatively small numbers of transactions that it was used to make on a global scale. While the traditional financial industry processed around 500 billion transactions annually, he said, Bitcoin accounted for a ‘completely insignificant’ 100 million financial transactions.
The BBC reported that a study in the scientific journal Joule had estimated that the electricity used by Bitcoin produced around 22 megatons of CO2 annually.
Original article by Tech Data Newsflash, edited by TDConnect editors