EXTENSION Mining and electricity costs

Since the modern economy has moved into the digital space, it requires much more energy. Peter Kelly Detviler, co-founder of NorthBridge Energy Partners, a consulting firm that helps companies to connect to power grids, explored the impact that will have on cryptocurrency energy consumption.

Kelly Detviler notes that while cryptocurrency is virtual, it is directly dependent on electricity. At the same time hundreds of megawatts of electricity used to produce Bitcoins.

Miner ubiquitous

One of the reasons for such a huge amount of electricity lies in the fact that all the miners are too scattered over the planet. It is worth noting that many maynerskie pools still focus their equipment in areas where electricity is very cheap.

Most Chinese maynerskih centers are concentrated in the vicinity of Tibet, where hydropower is the cheapest in the country. These data centers also operate in Iceland, Malaysia, Venezuela, the Republic of Georgia and the other countries where there are not problems with expensive electricity.

As noted by Kelly Detviler energy for computers comparable to the gasoline for the huge machines that extract minerals from the mountain slopes.

As mining consumes energy?

Mining cryptocurrency is a complex process. Kelly Detviler explains that the miners can create new coins by solving mathematical equations by using their computers. This allows you to create a new block transactions, attach it to Blokcheynu kriptovalyutnoe and get a reward.

The new unit is created every 10 minutes, so between computers, there is a serious competition. This win is only the first among many, so miners are making millions of attempts at solving the task. Special computers are in the range of "tera-hash", allowing to make a trillion attempts per second.

The more miners involved in the process, the greater the level of difficulty acquiring mathematical equations. This growing level of complexity is the idea, which can slow the creation of new Bitcoins. Increasing difficulties create the need for faster machines, which consume more electricity.

supersets Bitcoin

Reuters reports that Bitcoin is a computer network to 43,000 times more powerful than the top 500 supercomputers in the world combined. Estimates show that by 2020, mining Bitcoins can consume 14,000 megawatts of electricity, which is comparable with the total capacity of the Danish power.

However, the difference between the nominal value cryptocurrency and the cost of its production can be critical minimal or negative, that will challenge the viability of digital currency.

Evaluation of 600 megawatts

One of maynerskoy company executives, who wished to conceal his name, said that the global maynerskie capacity is estimated at 600 MW. This is based on the amount of computation in a network, as well as the average energy efficiency. A reasonable question arises: Does the energy consumption can inhibit the development of Bitcoin?

New equipment for the production is expected to be 3 times faster than the current. Some experts estimate that spending on mining in the range of $ 250 million per year, and additional costs are about $ 500 million. Compared to the $ 525 million annual income limit is not dangerous so far.

However, the efficiency of Bitcoin predicts him an excellent future. The total value of transactions $ 60 billion was slightly higher in 2015, and the system network cost about half a billion dollars. PayPal, by contrast, has spent about $ 2 billion to 1.4 billion transactions, and payments amounted to about $ 81 billion.

So Bitcoin is more effective if we consider the ratio of benefits to costs. This comparison is not perfect, but it perfectly describes the overall trend.