Bitcoin’s unprecedented popularity is giving rise to unprecedented consumption of energy to power it – in fact, it’s like powering Sri Lanka.
Like Powering Sri Lanka
Statistics uploaded to Bitcoin file hosting site Supload show the power needed to keep the Bitcoin ecosystem ticking over and processing transactions is similar to the energy consumption of the whole of Sri Lanka – 20.5 million people.
The information was compiled by the newly-launched Digiconomist Bitcoin Energy Consumption Index, a beta tool already providing startling reading.
Each transaction in Bitcoin currently uses 109 kilowatts of power – enough to power 3.67 US households for a day. The previous day’s activity used over 30 million kilowatt hours.
In total, Bitcoin’s estimated energy costs run to approximately 11 terawatt hours, costing more than $660 million USD.
Visa Transactions 15,000 Times Lighter?
Numbers of this magnitude may be difficult to compute, but go some way to justifying paying even the higher mining fees in order to get coins confirmed more quickly.
The beta also compares Bitcoin’s power usage to other payment systems such as Visa. Its network only consumes about 0.54 terawatt hours per year – around one-twentieth of Bitcoin’s.
In fact, every Bitcoin transaction could power 15,300 Visa payments.
“Of course, these numbers are far from perfect (e.g. energy consumption of VISA offices isn’t included), but the differences are so extreme that they will remain shocking regardless,” a commentary on the numbers reads.
Its collaborators go on to suggest Bitcoin’s thirsty ecosystem need not be so thirsty in future. One idea it puts forward is Bitcoin switching to proof-of-stake, the running costs of which are “negligible” by comparison.
“Bitcoin could potentially switch to such a consensus algorithm, which would significantly improve sustainability,” the comments continue.
The only downside is that there are many different versions of proof-of-stake, and none of these have fully proven themselves yet. Nevertheless the work on these algorithms offers good hope for the future.
‘There Are Some Things Money Can’t Buy…’
Not everyone is reacting to the Digiconomist angle so easily, however. Bitcoin Foundation Founding Director Jon Matonis commented on Twitter that a truly decentralized money without government is “priceless.”
Decentralized resilient money without government…..priceless. https://t.co/Qmqd2UFePd
— Jon Matonis (@jonmatonis) January 1, 2017
BitFury vice-chairman George Kikvadze meanwhile postulated Bitcoin’s consumption was more like that of Cyprus and Macau – and a tiny fraction of China’s current needs.
— George Kikvadze (@BitfuryGeorge) January 1, 2017
Is Bitcoin’s energy consumption ‘priceless’ and worth it for having a currency free from government control? Let us know in the comments below!
Images courtesy of twitter, shutterstock