The cost to mine 1 bitcoin based on the average electricity rate per country

As a counter-point, the researchers do say that Bitcoin is one of a large subset of energy consumers that can rank alongside entire countries. For example, always-on but inactive home devices in the U. Overall, the estimates show that Bitcoin accounts for 0. Bitcoin "mining" involves using — often specialized — servers to connect to the cryptocurrency blockchain network.

Bitcoin Energy Consumption Index - Digiconomist

These servers are tasked with verifying transactions made by people sending or receiving Bitcoin. The process involves solving puzzles that act as a barrier for anyone attempting to fraudulently edit the global Bitcoin transaction history. Bitcoin miners are rewarded by occasionally receiving small amounts of Bitcoin in a feature that is often likened to a lottery.

Miners often fill entire warehouses with Bitcoin mining computers. Roughly seven percent is in the US, just under seven percent in Russia, six percent in Kazakhstan, four percent in Malaysia, and nearly four percent in Iran.

Environmental conundrum

First, the notional value of any cryptocurrency is meaningless unless it includes the cost per watt of mining it via expensive, power-hungry GPU-based systems, FGPAs, and other rigs, such as the more energy-efficient ASICs. All of this hardware is costly to manufacture and ship across the world, rapidly becomes obsolete, and so eventually ends up in landfills — as do other types of ICT hardware, of course. Mining rigs also generate a lot of heat, which demands cooling, so the environmental impact is significant in every respect.

However, the critical difference is that if the notional value of a Bitcoin — or any cryptocurrency — is low at a given time, then some miners will be spending more on rigs, electricity, operation, maintenance, and labour than they make from mining the coins in traditional money terms.

Did you know Bitcoin runs on an energy-intensive network?

In short, they will be losing dollars. But what of the Chinese aspects of the coin? Why are they significant — beyond the vast accumulation of virtual wealth in one nation two thirds of all Bitcoin mining?

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This is where energy becomes a critical factor — and especially coal. So the environmental impact of its electricity habit is massive. But it still gives us an approximate estimate of the energy consumption of Bitcoin today, relative to other ICT uses. Click here to join our channel indianexpress and stay updated with the latest headlines.

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Electricity needed to mine bitcoin is more than used by 'entire countries'

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