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Not good for your leecy bill though...
The skyrocketing value of Bitcoin is leading to soaring energy consumption. According to one widely cited website that tracks the subject, the Bitcoin network is consuming power at an annual rate of 32TWh—about as much as Denmark. By the site's calculations, each Bitcoin transaction consumes 250kWh, enough to power homes for nine days.
Naturally, this is leading to concerns about sustainability. Eric Holthaus, a writer for Grist, projectsthat, at current growth rates, the Bitcoin network will "use as much electricity as the entire world does today" by early 2020. "This is an unsustainable trajectory," he writes.
Global energy production obviously can't double in two years, and it would be an environmental disaster if it did. Fortunately, while the Bitcoin network consumes a ridiculous amount of energy, particularly on a per-transaction basis, the situation isn't as dire as critics like Holthaus claim.
Bitcoin's energy consumption won't necessarily march steadily upward. Indeed, Bitcoin's energy consumption is designed to fall in the long run. And Bitcoin's energy consumption isn't tied to the number of transactions the network handles. That means that increasing use of the network won't necessarily impose a high environmental cost.
The Bitcoin network consumes massive amounts of energy
Bitcoin mining—the process that generates new bitcoins while maintaining the network's shared transaction ledger—is a secretive global industry. No one knows exactly how much energy it consumes.
However, we can make some educated guesses. For starters, we know the industry's revenue: Bitcoin miners currently generate 75 bitcoins per hour, which, at the current price of around $12,500 per bitcoin, translates to $937,500 per hour, or more than $8 billion per year.
Moreover, the industry is highly competitive, and electricity is one of its biggest costs. So when the price of bitcoins rises, we can expect miners to spend more and more on electricity until electricity costs are roughly on par with revenues.
