Bitcoin Mining Should Be Done In An Environmental-Friendly Way
Bitcoin is such a hot topic nowadays, whether the internet, newspaper, television, or people around are talking about it. Someone praises its pseudonymous, someone concerns about its volatility, however, today, I am going to talk about its energy consumption.
First of all, let’s understand what is Bitcoin mining.
As the video mentioned, in the early days, Bitcoin miners solved the math problems with the processors and their computers. Soon, miners discovered that graphics cards used for gaming were much better suited to this kind of working. Graphics cards are faster, but they use more electricity and generate a lot of heat. Then, the first commercial Bitcoin products included chips that were reprogrammed for mining Bitcoin. These chips were faster but still power-hungry. For instance, Application Specific Integrated Circuit (ASIC) chips, are designed specifically for Bitcoin mining. ASIC technology has made Bitcoin mining even faster while using less power. Although the technology for Bitcoin mining is developing, it still has huge consumption on electricity. The graphs below show the trend of Bitcoin energy consumption between 2017 to 2018, and the forecast of energy consumption in 2018.
As we can see, with more and more bitcoin mining activities, the trend of energy consumption will only keep increasing. According to a recent New York Times article: “The computer power needed to create a single digital token consumes at least as much electricity as the average American household burns through in two years, according to figures from Morgan Stanley and Alex de Vries, an economist who tracks energy use in the industry.” As of 2015, The Economist estimated that even if all miners used modern facilities, the combined electricity consumption would be 166.7 megawatts (1.46 terawatt-hours per year). At the end of 2017, according to The Washington Post, the global bitcoin mining activity was estimated to consume between 1 and 4 gigawatts of electricity (between 9 and 35 TWh a year), with 1.2 GW as the theoretical lower bound assuming that everyone is using the most energy-efficient mining hardware available.
To lower the costs, bitcoin miners have set up in places like Iceland or Canada where is cold and coupled with relatively cheap electricity costs. They also use hydroelectric power in Tibet, Quebec, and Austria to reduce electricity costs. However, we then saw the news like Iceland Bitcoin Mining to Double Energy ConsumptionThis Year, or Hydro-Quebec Unable to Meet Energy Demand From Cryptocurrency Miners. Right now, we should be sober that the potential environmental and social cost for Bitcoin mining is far too high.
Therefore, to be more sustainable, Bitcoin mining should be done in an environmental-friendly way. To use reliable and renewable power source for Bitcoin mining must be direction of future development. For now, according to Japan Today, “The government of Kazuno City has been inviting companies that run businesses by using renewable, energy-derived, clean electricity. The city has an abundance of renewable energy including geothermal, hydroelectric and wind powers, and its self-sufficiency rate of electricity exceeds 300%.” In the future, we would like to see more and more Bitcoin mining centers go green.
At last, I would like to end using a quote from a Pirate Party legislator, Smari McCarthy, “We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”
What do you think about mining energy consumption? Welcome to comment.
I really like this post Siru, I had no idea that this much energy went into bitcoin mining. I agree that this is far too much energy to exert for something that is not considered tangible in society. I do feel that bitcoin is growing in popularity meaning that demand will remain present. As we continue to find green solutions for energy production this problem could solve itself with time.
Really interesting post! I have just seen a vide on the same topic that I have linked below. In the video, they mention that bitcoin mining uses more electricity than 140 countries (which is more than half of the countries on Earth). Furthermore, the 1-4 gigawatts of electricity that bitcoin mining consumes actually makes up 0.2% of all electricity use on Earth - that's an insanely large percent compared to how new bitcoin mining is. In the video, the argument is made that Iceland is the ideal location for bitcoin mining as the cold temperature lowers the cost needed to cool down all the computers in a mine. Furthermore, Iceland is powered by 100% renewable energy; thus, bitcoin mines don't leave a negative carbon footprint. (Link to video: https://www.youtube.com/watch?v=4bfECHhoBBQ )
On a separate note, while the graphs in your post show an ever increasing mining, I believe that the amount of bitcoin mining will soon reach a peak for two reasons. Firstly, the amount of bitcoin has a set upper limit. Once this upper limit is reached, mining will likely become more competitive as there will be less bitcoin given to miners for their work. Secondly, I think as bitcoin's price stabilizes (possibly at a lower price than today), it won't be worth for some percent of the miners to mine it since the value of bitcoin they receive won't offset the enormous electrical bills they pay for running the machines.
Thanks for the video link @Andras. It's great topic, and bitcoin mining is certainly hitting the media because of its energy consumption. @Siru, I also like the last quote. "That can't be good." The question that remains about stabilization, is when is "soon." I think it will, but that is really hard to predict at the moment, and in the meantime, the high energy bills seems unsustainable.
This is a fascinating topic. I read further about bitcoin mining and how countries like Iceland are dealing with the increasing demand for Bitcoin mining due to its cooler climate and cheaper electricity costs. According to Johann Snorri Sigurbergsson, spokesman for Icelandic energy firm known as HS Orka, new mining centers could face power outage in particular areas. However, the government officials are considering certain changes in regards to mining operations, as many of them do not require staff, infrastructure or further investments – resulting in low taxes, fast profit and high energy consumption. Bitcoin mining clearly requires a great demand of environmental costs. Hopefully Bitcoin Mining can become more sustainable by minimizing its large environmental costs.
Before reading this I had no idea what bit coin mining meant. I've talked to fellow developers and they too had some grey area on the topic. From what they said were that mining is when someone does complex algorithms to get odd numbers and with these numbers they can be used for transactions I believe. But as you can tell it takes lots of computing power as the numbers increase. Thus this new trend like Andres said can be stunted due to all the energy it tends to consume.
This statistic really stood out to me that, “The computer power needed to create a single digital token consumes at least as much electricity as the average American household burns through in two years," that's crazy! It reminded me of another article I just read about the EU wanting to ban bitcoin mining due to high energy consumption, but legally having no way to. The article states that, "Experts told the Post that bitcoin mining alone consumes roughly 0.14 percent of the world's generated electricity supply - a conundrum some in the blockchain industry believe creates a strong incentive for experiments with sustainable energy solutions." Hopefully they find a sustainable source to continue with mining. The article I found is here EU Can't Ban Bitcoin Mining Over Energy Concerns, Official Says .
Very interesting article. It's funny how a lot of people think "mining" for bitcoin is actually a labor-intensive process, rather than a passive activity that one's very own computer can do on its own. This post makes me wonder how bitcoin is able to stay profitable for low-volume miners considering the more you that mine, the higher your electricity bill will be. I found this article that offers some more insight into the topic https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/
Therefore, to be more sustainable, Bitcoin mining should be done in an environmental-friendly way. To use reliable and renewable power source for Bitcoin mining must be direction of future development. For now, according to Japan Today, “The government of Kazuno City has been inviting companies that run businesses by using renewable, energy-derived, clean electricity. The city has an abundance of renewable energy including geothermal, hydroelectric and wind powers, and its self-sufficiency rate of electricity exceeds 300%.” In the future, we would like to see more and more Bitcoin mining centers go green.
I really like this post Siru, I had no idea that this much energy went into bitcoin mining. I agree that this is far too much energy to exert for something that is not considered tangible in society. I do feel that bitcoin is growing in popularity meaning that demand will remain present. As we continue to find green solutions for energy production this problem could solve itself with time.
ReplyDeleteDo you think there will be a push for green solutions to produce greener energy, or it will solve itself over time naturally?
DeleteReally interesting post! I have just seen a vide on the same topic that I have linked below. In the video, they mention that bitcoin mining uses more electricity than 140 countries (which is more than half of the countries on Earth). Furthermore, the 1-4 gigawatts of electricity that bitcoin mining consumes actually makes up 0.2% of all electricity use on Earth - that's an insanely large percent compared to how new bitcoin mining is. In the video, the argument is made that Iceland is the ideal location for bitcoin mining as the cold temperature lowers the cost needed to cool down all the computers in a mine. Furthermore, Iceland is powered by 100% renewable energy; thus, bitcoin mines don't leave a negative carbon footprint. (Link to video: https://www.youtube.com/watch?v=4bfECHhoBBQ )
ReplyDeleteOn a separate note, while the graphs in your post show an ever increasing mining, I believe that the amount of bitcoin mining will soon reach a peak for two reasons. Firstly, the amount of bitcoin has a set upper limit. Once this upper limit is reached, mining will likely become more competitive as there will be less bitcoin given to miners for their work. Secondly, I think as bitcoin's price stabilizes (possibly at a lower price than today), it won't be worth for some percent of the miners to mine it since the value of bitcoin they receive won't offset the enormous electrical bills they pay for running the machines.
Thanks for the video link @Andras. It's great topic, and bitcoin mining is certainly hitting the media because of its energy consumption. @Siru, I also like the last quote. "That can't be good." The question that remains about stabilization, is when is "soon." I think it will, but that is really hard to predict at the moment, and in the meantime, the high energy bills seems unsustainable.
DeleteThis is an excellent video that @Andras posted. This video explains in more detail how Genesis works in Iceland, and how they use 100% renewable energy.
DeleteThis is a fascinating topic. I read further about bitcoin mining and how countries like Iceland are dealing with the increasing demand for Bitcoin mining due to its cooler climate and cheaper electricity costs. According to Johann Snorri Sigurbergsson, spokesman for Icelandic energy firm known as HS Orka, new mining centers could face power outage in particular areas. However, the government officials are considering certain changes in regards to mining operations, as many of them do not require staff, infrastructure or further investments – resulting in low taxes, fast profit and high energy consumption. Bitcoin mining clearly requires a great demand of environmental costs. Hopefully Bitcoin Mining can become more sustainable by minimizing its large environmental costs.
ReplyDeleteBefore reading this I had no idea what bit coin mining meant. I've talked to fellow developers and they too had some grey area on the topic. From what they said were that mining is when someone does complex algorithms to get odd numbers and with these numbers they can be used for transactions I believe. But as you can tell it takes lots of computing power as the numbers increase. Thus this new trend like Andres said can be stunted due to all the energy it tends to consume.
ReplyDeleteThis statistic really stood out to me that, “The computer power needed to create a single digital token consumes at least as much electricity as the average American household burns through in two years," that's crazy! It reminded me of another article I just read about the EU wanting to ban bitcoin mining due to high energy consumption, but legally having no way to. The article states that, "Experts told the Post that bitcoin mining alone consumes roughly 0.14 percent of the world's generated electricity supply - a conundrum some in the blockchain industry believe creates a strong incentive for experiments with sustainable energy solutions." Hopefully they find a sustainable source to continue with mining. The article I found is here EU Can't Ban Bitcoin Mining Over Energy Concerns, Official Says .
ReplyDeleteGreat article, Cali. Thanks.
DeleteThanks Dr. Suzie! :)
DeleteVery interesting article. It's funny how a lot of people think "mining" for bitcoin is actually a labor-intensive process, rather than a passive activity that one's very own computer can do on its own. This post makes me wonder how bitcoin is able to stay profitable for low-volume miners considering the more you that mine, the higher your electricity bill will be. I found this article that offers some more insight into the topic https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/
ReplyDelete