The bitcoin network reportedly will soon consume nearly as much electricity as the entire countries of Ireland or Austria as the creation of the controversial cryptocurrency and its drain on local power systems is scrutinized.
“The bitcoin network can be estimated to consume at least 2.55 gigawatts of electricity currently, and potentially 7.67 gigawatts in the future, making it comparable with countries such as Ireland (3.1 gigawatts) and Austria (8.2 gigawatts),” reported a new study by Dutch researcher and economist Alex de Vries.
“A look at bitcoin miner production estimates suggests that this number could already be reached in 2018.”
A watt is defined as a measure of power and there’s 1 billion watts in a gigawatt (GW), which the U.S. government says is comparable to 4.6 million solar photovoltaic (PV) panels, 500 wind turbines or roughly 1.3 million horses.
Producing each bitcoin is called “mining,” and it requires a fair amount of computer processing power to verify the transactions that create the coin as well as add them to the public ledger.
Various studies have attempted to quantify the energy used in bitcoin mining with relatively different results. If there's two things all parties agree on, it's that Bitcoin mining is energy intensive, and that it's only expected to increase, NBC News has reported.
“Mining the cryptocurrency involves computers solving complex mathematical problems. As the amount of bitcoin left to mine grows smaller and smaller, the problems become increasingly complex, meaning they require an even greater amount of computing power,” reported RT, a Russian international television network funded by the Russian government.
“Due to the secretive nature of mining, the research is based on speculative figures. The cryptocurrency’s network is estimated to have around 10,000 connected nodes, but a single node in the network can represent either one or many machines.”
Some experts have queried the study’s findings, claiming it is the latest example of overblown concerns about the strain that computers put on the electricity network.
“The worry is that those are two numbers that are picked out of the air,” Stanford researcher Jonathan Koomey told NBC News.
“There may be some basis for them, but it’s a very unreliable way to do these kinds of calculations, and nobody who does this for a living would do it like that. It’s odd that someone would,” Koomey said.
“My concern is that we simply don’t have adequate data to come to the strong conclusions that he’s coming to.”
Meanwhile, the controversial study just added to an already lousy week for virtual currencies.
The value of virtual currencies tracked by Coinmarketcap.com from sinking by $45 billion since May 11, Bloomberg reported.
Bitcoin, the most popular of the bunch, dropped 3.7 percent this week to $8,117.43 even as Arthur Hayes — the crypto exchange executive whose firm rented the Lamborghinis — predicted a surge to $50,000 by year-end.
While bulls point to a vast pool of pent-up demand from professional money managers, it’s far from clear that regulations in the U.S. and elsewhere will evolve in ways that attract institutional investors.
Many Wall Street pros have dismissed the market as a speculative bubble, while Warren Buffett has likened bitcoin to “rat poison squared.”
(Newsmax wire services contributed to this report).
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