- The Bitcoin mining network is estimated to consume nearly $3 billion in electricity annually.
- Bitcoin hash rate is rising despite declining revenue following the Bitcoin halving.
Bitcoin is widely known as the largest proof-of-work cryptocurrency. In other words, the Bitcoin network employs miners to process and validate transactions on the blockchain. These miners consume massive amounts of electricity equating to more electricity than entire countries.
According to Digiconomist, the Bitcoin network is currently estimated to consume over 60 TWh of electricity. Furthermore, the Cambridge Bitcoin Electricity Consumption Index also offers a lower but still very high estimate of 57.63 TWh, which equates to approximately 0.26% of the entire world’s electricity consumption.
Digiconomist also estimates that Bitcoin miners consume upwards of $3 billion in electricity a year. This estimate is calculated using a $0.05 KWh electricity rate. Some miners may have electricity rates lower than this while some may have electricity rates that are higher. Therefore it is important to note that this figure is just an estimate.
Despite the massive electricity bill, it seems that miners on average, are still making a profit mining the popular cryptocurrency.
Arguably more importantly, while miners are consuming vast amounts of electricity, the Cambridge Bitcoin Electricity Consumption Index notes that renewable energy sources can power the Bitcoin network many times over. Using renewable energy can help minimize the environmental impact the Bitcoin network has.
Bitcoin Hash Rate Reaches New Highs
The Bitcoin halving in May cut the block reward from 12.5 Bitcoin to 6.25 Bitcoin in order to curb the cryptocurrency’s emission. However, after initially falling, hash rate is skyrocketing breaking new records despite the reduced revenue.
In order to maintain its 10 minute block time, Bitcoin mining difficulty reached an all-time following the most recent difficulty retarget on July 13. With Bitcoin’s difficulty moving upwards, it is now more difficult and compute-intensive to mine Bitcoin.
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