June 14, 2021

Why Bitcoin Uses So Much Power

Why Bitcoin Uses So Much Power

While crypto enthusiasts are waiting for a rise in the price of Bitcoin as they implement another halving on the network, all more attention is paid to the challenges facingto this industry. One of them is the amount of energy consumed by Bitcoin. So, on average, a network consumes enough energy to power, for example, Venezuela.

Why does Bitcoin need so much electricity?

As thousands of people mine BTC, this leads to high network activity. On average, miners generate approximately 75 BTC per hour, or $ 7 billion per year.

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

Total energy consumptionused by the network is closely related to the value of the cryptocurrency. With a sharp decrease in the value of a coin, 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 electric crisis will develop.

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

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

Rapid changes in the world of mining Bitcoin

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

This market volatility affects the brinkfuture value of bitcoin. If prices rise significantly in a short period of time, the amount of energy used by BTC miners can overwhelm existing power networks 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 energy crisis in Bitcoin

Solve the impending energy crisismuch harder than most people think. One of the main things that a miner can do is try to reduce the cost of these investments at the expense of the best electricity tariffs.

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 sources.energy. There is an opinion that other cryptocurrencies and mining communities will follow this example if BTC will put forward renewable energy as a solution.

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