Cambridge Bitcoin Electricity Consumption Index (CBECI) shows that Bitcoin emit a huge amount of the carbon through mining and Tesla has also announced that it will not accept bitcoin for its car purchase.
Context
Cambridge Bitcoin Electricity Consumption Index (CBECI) shows that Bitcoin emit a huge amount of the carbon through mining and Tesla has also announced that it will not accept bitcoin for its car purchase.
About the Energy Consumption status of Bitcoin
- Obtaining bitcoin is an energy intensive endeavor.
- The chart released by the CBECI showed the evolution of its power usage, rising constantly from 2016 and accelerating sharply in 2020.
- Bitcoin currently consumes around 110 Terawatt Hours per year, 0.55% of global electricity production, or roughly equivalent to the annual energy draw of small countries like Malaysia or Sweden.
- The IEA predicts the situation could worsen if miners used the most energy intensive equipment, their consumption could rise to 500 TWh.
- A terawatt-hour is a unit of energy equal to outputting one trillion watts for one hour. It is equal to 3.6x1015 Joules.
- This value is large enough to express annual electricity generation for entire countries
|
How the energy is consumed in Bitcoin generation?
-
The cryptocurrency is earned by participants in the network called "miners," who solve deliberately complicated equations using brute force processing power under the so-called "proof of work" protocol.
-
Proof of work" was one of the founding principles of the best-known cryptocurrency, created in 2008 by an anonymous person or group that wanted a decentralized digital currency.
-
During the mining process a huge amount of energy is consumed.
Proof of work (PoW)
- It is a decentralized consensus mechanism that requires members of a network to expend effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system.
- Proof of work is used widely in cryptocurrency mining, for validating transactions and mining new tokens.
|
- The system is designed so that around every 10 minutes, the network awards some bitcoin to those who have successfully cracked the puzzle.
Environment impact
- The high energy consumption would lead to higher Carbon emission.
- Emissions from mining could compromise the country's climate goals especially those countries which relies on a particularly polluting type of coal, lignite, to power some of its mining.
- For example Bloomberg predicts that it will take until 2060 before China can meet its cryptocurrency industry's needs through renewable energy.
Cambridge Bitcoin Electricity Consumption Index (CBECI)
- The Cambridge Centre for Alternative Finance launches a new real-time index tracking the total electricity consumption of the Bitcoin network.
- The index provides a real-time estimate of the total annual electricity usage of the Bitcoin network and enables live comparisons with alternative electricity uses in order to put numbers into perspective.
- The index has been developed in response to growing concerns over the sustainability and environmental impact of Bitcoin mining, which relies on computation-heavy cryptographic operations that require significant amounts of electricity.
- Reliable estimates of Bitcoin’s electricity usage are rare: in most cases, they only provide a one-time snapshot and the numbers often show substantial discrepancies from one model to another.
- The CBECI provides a neutral and objective platform for reliable information on Bitcoin’s electricity consumption for use by policymakers, regulators, researchers, the media and others.
|
