As the cryptocurrency market continues its rapid growth, it is estimated that Bit mining is using 20,000-gigawatt hours of electricity yearly. To put that into perspective, that power usage is comparable to that of Ireland. As Bitcoin mining demands the use of powerful computer software to solve the mathematical equations that generate the bitcoins, the mining appliances are to blame for the high energy consumption levels used to increase the blockchain. Those concerned with the world’s power generation question if bitcoin’s growth can be sustained, but history shows us that technology has a way of evolving to counteract such effects.
Mining equipment like the Antminer S9 is a computer processor used by miners to crunch algorithms that result in lengthening the blockchain. This processor uses 1.5 kilowatts, comparable to the power usage of two refrigerators and a flatscreen TV. So a miner running the Antminer constantly for a year will generate approximately 0.85 bitcoins, at the price of around 15,000-kilowatt hours. Of course, power costs fluctuate depending upon location, but the cost of mining one coin could cost between $600 to $1,800.
What if Bitcoin Keeps Growing?
Those concerned with bitcoin’s growth and drain on the world’s power grid have made some unrealistic claims. Some have gone as far as to predict that if bitcoin continues on its path of exponential growth, mining could sap the world’s power grid by 2020. These claims are thought by analysts to be overblown.
Analysts Michael Weinstein and Khanh Nguyen conclude that for it to come even close to that happening, the individual BTC price would have to skyrocket to $1.1 million. The analyst team further predicted that even if Bitcoin prices rose to $50,000, the increased efforts by P2P miners would still only consume less than 2 percent of the world’s power generation.
All these claims and predictions made by naysayers and analysts are based on current technology. As cryptocurrencies and the cryptocurrency marketplace evolves, so too will the technology used to sustain it. The complexity of the algorithms needed for proof of work can only be simplified in time, decreasing the energy consumption of the mining equipment.
The same fears were present with the growth of the internet and web servers. As the power consumption needs grew, data centers adapted to answer those needs. Again, the same questions are being raised regarding the ever-expanding marijuana industry.
There is an economic understanding called the ‘substitution effect’ that will come into play with the bitcoin revolution. As prices increase or incomes decrease, consumers will turn away from costly items and towards more economically-feasible options. In that same vein, the cryptocurrency payment systems will eventually replace our costly credit card companies and their huge data centers. There is always a trade-off with technology. As it evolves, one form is replaced by a more efficient option, one more reflective of the needs of the marketplace it occupies.
As bitcoin miners attempt to fill their Wallet, their private key and Signature help to safeguard the system in which they are working; in a similar way, technology is a somewhat self-sustaining organism that has a way of regulating itself through its own evolution.