The total Bitcoin mining electricity usage has now increased to the point that it can power a small country, a report by the International Energy Commission (IEA) reveals.
The constantly rising hash rates and ever-increasing mining difficulty seem to indicate that the power consumption for cryptocurrency mining is expected to rise.
Since the upsurge of Bitcoin in 2017, the media attention diverted to the energy consumption during the cryptocurrency mining and its consequent environmental footprint.
In this era, where consciousness about climate change prevails, and the awareness is being promoted, will these energy-guzzling digital currencies be welcomed?
A report published by the International Energy Agency (IEA) stated that between twenty to eighty TWh or 0.1-03percent of energy is consumed globally during Bitcoin mining. The difference in estimates is due to the inadequate official documentation for the miners, which in turn tends to cause difficulty in calculating the actual energy consumption during the mining process.
The rise in prices of Bitcoin, especially due to the media attention in 2017 caused the mining difficulty and hash rates to increase, along with the development of more efficient and powerful ASICs.
Although acknowledging the havoc that is being caused by energy consumption on the environment, the article states that over seventy percent of the consumed energy for mining is sourced from renewable resources. Hence, Bitcoin mining is responsible for ten to twenty Mt of carbon dioxide emissions per annum.
However, it seems as if the report of IEA is playing favorites with digital currencies. One section of that article emphasized the existence of other digital currencies with a lesser environmental footprint per transaction.
It was stated that it is imperative to recognize Bitcoin as one of many other cryptocurrencies that is an application of a blockchain.
Ethereum is the second-largest digital currency in terms of market value tends to process double the number of transactions as that of Bitcoin whilst utilizing almost one-third of the energy that is consumed by Bitcoin.
Moreover, Ethereum currently operates on the Proof-of-Work (PoW) consensus mechanism, while its founder has reportedly announced to shift to a Proof-of-Stake (PoS) to reduce the intensity of energy.