Even though bitcoin solely exists in digital zeroes and ones, the computers that run the network are huge energy hogs.
According to the bitcoin energy consumption tracker at Digiconomist, bitcoin currently consumes 66.7 terawatt-hours per year. That’s comparable to the total energy consumption of the Czech Republic, a country of 10.6 million people.
Bitcoin’s energy appetite is fused into its foundations. Since there is no central bank or authority governing the currency, the bitcoin network regulates itself through a distributed accounting system known as the blockchain. In the blockchain, every bitcoin transaction is tracked in a public ledger spread across thousands of computers. These transactions are grouped into blocks. However, it’s tedious to reconcile and verify every single instance of digital currency changing hands, and verifying a block requires finding a cryptographic key, an increasingly difficult computing problem.
The Bitcoin network
The bitcoin network creates an incentive for people to contribute computing power to verify transactions by awarding bitcoins to a miner who verifies a block (currently 12.5 bitcoins). With the price of a bitcoin right now at roughly $9,000, that’s an award of more than $112,000. This is how bitcoins are “mined,” and with the right hardware and cost inputs, it can be quite lucrative. Blocks are added to the blockchain roughly every 10 minutes.
But mining is competitive, with only one miner winning the award per block. Over time, the calculations needed to verify a block become more difficult, and the bitcoin award shrinks. The price is also unstable. Bitcoin’s price peaked at more than $19,500 in December 2017. These factors have created an arms race to develop better computer hardware to more rapidly verify transactions and a push to devote ever-increasing amounts of electricity to the task.
Benefits of Renewable Energy
Environmental and economic benefits of using renewable energy include:
- Generating energy that produces no greenhouse gas emissions from fossil fuels and reduces some types of air pollution
- Diversifying energy supply and reducing dependence on imported fuels
- Creating economic development and jobs in manufacturing, installation, and more
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