Why Bitcoin Uses So Much Power

 

While crypto enthusiasts are waiting for the price of Bitcoin to rise as the next halving is implemented on the network, everyonegreater attention is paid to the problems facingto this industry. One of them is the amount of energy consumed by Bitcoin. So, the network on average consumes enough energy to power, for example, Venezuela.

 

Why does Bitcoin need so much electricity?

With thousands of people mining BTC, this results in high activity on the network. On average, miners generate approximately 75 BTC per hour or $7 billion per year.

As the price of Bitcoin rises more and moreminers join the network. If electricity rates are much lower than the price of a coin, the ends justify the means. On average, the industry spends approximately 60% of revenue on electricity costs, while the BTC network consumes approximately 74.75 TWh of electricity per year.

Cumulative level of energy consumption,used by the network is closely related to the value of the cryptocurrency. When the value of a coin drops sharply, the amount of energy used by the network. also goes down. Since the total value of Bitcoin is unpredictable, only time will tell how the electrical crisis will develop.

What makes it difficult to evaluate Bitcoin's electricity usage?

Please note that there are no clear figures as to whetherexactly how much energy is used by the BTC network and miners. Due to their absence, many crypto enthusiasts attribute this energy crisis to scare tactics used by traditional banking institutions. Tracking the exact amount of electricity is difficult for several reasons.

Rapid changes in the world of Bitcoin mining

Most people do not understand that the crypto world is changing much faster than most other IT infrastructures.

This market volatility is affecting thefuture value of Bitcoin. If prices rise significantly in a short period of time, the amount of energy used by BTC miners could overwhelm existing power grids in the United States and other countries.

Different computing load efficiencies

The amount of electricity used inThe mining process is also influenced by factors such as the total computing load, the number of miner installations and the complexity of the BTC network. Each of these factors can change at any time, therefore, the amount of electricity used for one BTC mining transaction can also change.

Possible solutions to the Bitcoin energy crisis

Solve the looming energy crisismuch more complicated than most people think. One of the main things a miner can do is – it attempts to reduce the cost of these investments through the best possible electricity rates.

In the past, companies like Google have allowedpeople from the BTC mining community to acquire net energy assets. A large-scale campaign to sell these net energy assets will help offset the environmental impact of mining.

You can also use renewable sourcesenergy. There is a belief that other cryptocurrencies and mining communities will follow suit if BTC pushes renewable energy as a solution.

Only time will tell how the cryptocurrency industry will cope with the energy crisis.