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| Close-up of Bitmain mining farm in Iceland |
The amount of electricity needed to run the Bitcoin economy, i.e. the electricity needed to operate "miners", has gone haywire. Mining involves running sophisticated algorithms to verify each transaction in the blockchain, earning newly-minted Bitcoins along the way. This process used to be done with idle processing power on desktop computers; nowadays, as more and more powerful computers are unleashed to compete for new Bitcoins, miners in China and Venezuela (where electricity is free or dirt cheap) deploy massive arrays of dedicated, purpose-built computers.
According to new research, as Bitcoin prices skyrocketed to US$17,000 from only US$1,000 in less than 12 months, the cost of Bitcoin mining has also gone up: 32 terrawatt-hours on an annualized basis, equal to the energy use of Serbia (population: 7m), or about 1% of energy use in the United States (population: 320m). In ~10 years the energy use is expected to exceed that of the entire North America.
All this, just to solve meaningless math problems.
Needless to say, this doesn't really bode well for the cryptocurrency-based economy.
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