It’s no secret that Bitcoin mining is an energy intensive process. However, the latest research carried out by the University of Cambridge showed just how much. Bitcoin mining accounts for around 0.25 percent of global energy consumption. Put another way, that is a little more than the energy used by the whole of Switzerland. But perhaps the even more alarming fact is that this figure is going up with every passing day.
The Cambridge Bitcoin Electricity Consumption Index states that the annual consumption stands at about 60.45 TWh. If Bitcoin were a country, that would place it 41st on the list in terms of energy consumption, ahead of Switzerland, Israel and Bangladesh, and just behind Chile and Austria.
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Why so much?
Computer processors generate or “mine” bitcoins by verifying transactions on the blockchain network. To do this, they solve complex mathematical puzzles. As the network grows, so the complexity of the puzzles increases, and so, in turn, does the processing power needed to solve them.
The study, which was led by economist and blockchain guru Alex de Vries, predicted that as Bitcoin’s popularity increases, so will its energy demands. This has added fuel to the debate over whether Bitcoin has the necessary scalability to ever launch crypto into the mainstream.
All cryptocurrencies are not the same
Bitcoin might be the original and best-known cryptocurrency, but it is not the only one. There are many commentators who believe that ultimately, while Bitcoin will be seen as the pioneer of cryptocurrency, it will be an altcoin that takes crypto to the next level. Still more feel that the number of traders who are choosing to buy Ethereum classic shows exactly where we should be turning our attention.
Ethereum has been Bitcoin’s stalking horse for the past three or four years, and while it is still far smaller in terms of market cap, it has the technological flexibility that could make it far more sustainable from an energy perspective.
How is Ether different?
Right now, Ethereum has a similar energy footprint to Bitcoin. In terms of the consumption index, it stands at around 77 on the “countries” list, on a par with Iceland. Put another way, one Ethereum transaction uses more energy than the typical U.S. household consumes in an entire day.
However, Ethereum founder Vitalik Buterin is in no mood to stand back and watch it happen. He described the power demands of crypto as “a huge waste of resources,” and went on to say: “There are real consumers — real people — whose need for electricity is being displaced by this stuff.”
Buterin and his Ethereum Foundation have announced plans to properly test a complete overhaul of the Ethereum’s code. If the calculations of Buterin and his developers are right, the new code could mean transactions are completed using just one percent of the energy demands we see today.
As well as being good news for the planet, it could be a shrewd step for Buterin in ensuring Ethereum has a sustainable future.