Bitcoin consumes the same amount of energy as the whole of Switzerland. That’s according to a new tool devised by the University of Cambridge.
The tool provides a more convenient way to determine how cryptocurrency networks’ energy consumption weighs against other entities. Although, an expert argues that what matters most is cryptocurrency’s carbon footprint.
As of now, the tools say that Bitcoin is utilizing around seven gigawatts of electricity or 0.21% of the world’s supply.
That is equal to the energy that can be produced by seven Dungeness nuclear power plants at a given time. When summed in a year, this is equivalent to the same power usage of Switzerland.
Co-creator Michel Rauchs from the University of Cambridge says they opted use comparisons to set a narrative. He added that visitors to the website could decide whether the results are large or small.
How do cryptocurrencies work?
To successfully “mine” Bitcoin, computers dubbed as mining machines must be linked to the cryptocurrency network.
Then, they are obliged to verify transactions created by people who receive or send Bitcoin. The process consists of solving puzzles.
These puzzles aren’t critical to confirming movements of Bitcoin but are mere hurdles to make sure that no one fraudulently alters the worldwide record of all the transactions. As a token for doing this for the system, miners often get minimal amounts of Bitcoin.
To make large sums of money from the process, people sometimes connect a vast number of miners to the network. Sometimes, even a whole warehouse brimmed with them. Thus, consuming lots of energy as miners are most likely working non-stop.
The tool resembles the economic journey of the globe’s Bitcoin miners. It applies the average electricity cost per kilowatt hour in correlation with the energy requirements of the Bitcoin network. Lastly, the tool considers that all of the Bitcoin mining machines in the world are simultaneously functioning with varying efficiencies.
Through that, it is made possible to assess the amount of electricity is being used at a single time.
Alex de Vries, a Bitcoin energy expert from accountants PwC, created a similar mechanism to gauge Bitcoin’s power consumption use the previous year.
De Vries said the most significant contributor to its carbon footprint of Bitcoin’s power usage. It is the emissions connected with the energy resources utilized to provide electricity to the cryptocurrency network. This differs from one place to another, depending on current equipment.
De Vries noted that notwithstanding its many enthusiasts, the Bitcoin network has a power consumption dilemma. It utilizes lots of electricity even though it only processes less than 100 million business transactions each year.
He appended that the figure was “totally irrelevant” in global terms. The conventional financial industry incurs 500 billion transactions every year.
Lastly, he stressed that Bitcoin still seems to consume more power per transaction compared to all the banks in the world combined, if counting the amount of electricity utilized by each data center.
The energy utilized for Bitcoin generates about 22 megatons of CO2 each year, as assessed in research in the scientific journal Joule. That is equivalent to Kansas City’s in the US.