The rapid growth in the price of bitcoin is accompanied by an increase in the amount of energy needed to produce this crypto currency. Mining bitcoins now burns more electricity than all electric vehicles in the world.
As reported by fortune.com, on January 10, experts of Morgan Stanley Bank published a report containing a comparative analysis of the energy needs of crypto-currencies and electric vehicles. According to him, in 2018 the energy requirements associated with bitcoin will grow threefold. For a year, this digital currency will consume more electricity than the entire population of Argentina.
Analysts of the bank predict that this year mining will require more than 125 billion kWh of electricity, that is, the volume that all electric vehicles in the world will reach only by 2025. Last year, bitcoin consumed 36 billion kWh, which is equal to the energy costs of Qatar.
In comparison, all Tesla electric vehicles in service (at the end of 2017, according to the manufacturer, their number was approximately 280,000) consumed less than 1.3 billion kWh per year. According to analysts of the Fortune magazine, each car has, on average, run a mileage of 15,000 miles, spending every 100 miles 30 kWh. Such data experts calculated, based on statistics on cars Tesla Model 3 and Model S, previously provided to the US Environmental Protection Agency.
This means that the extraction of bitcoins last year consumed 29 times more energy than the work of all Tesla cars.
The Internet user, acting under the name of Frank99, published similar calculations on the forum website of the company Tesla, accompanied them with an emotional comment:
It’s just crazy.
In 2016, the amount of energy consumed by all electric vehicles in the world was about 6 TWh.
The reason that mining consumes so much electricity is that the production of each new bitcoin requires solving a complex mathematical puzzle in the course of the cryptographic process carried out by powerful computers. The decision of puzzles is designed to verify bitcoin transactions in the digital registry — the blockbuster. It is believed that most other crypto-currencies require significantly less energy for mining.
According to Morgan Stanley analysts, the production of one bitcoin costs from $ 3,000 to $ 7,000, including energy and equipment costs. Nevertheless, as the bank experts write, «mining is a highly profitable occupation, and if the crypto-currencies keep their popularity, we can expect the growth of global energy consumption for the purposes of mining.»
However, analysts of the bank failed to find out how the price of bitcoins and the cost of electricity are correlated, suggesting that investors buying bitcoins are not interested in the issue of the exact price of coin production. It also follows that, although the crypto currency is surprisingly volatile and sensitive even to the most insignificant news, the price of bitcoin is unlikely to be seriously affected by fluctuations in electricity tariffs. At least, according to experts, this can not be expected in the near future.
At the same time, experts told energy companies how they can raise the value of their assets using crypto currency:
Perhaps they should start accepting payments in bitcoins.