We have heard about blockchains that consume excessive amounts of electricity. You've probably heard that bitcoin uses more energy than most countries, for example.
It's true! If the bitcoin was classified in relation to the rest of the world in terms of energy consumption, it would be the 47th largest consumer of energy in the world, according to a recent series of tweets by Tim Swanson.
by perspective, ~ 50.5 billion kWh / l & # 39; year would place the Bitcoin network in 47th place on the list of countries for electricity consumption, right between Algeria and Greece: https: //t.co/ 07tLoF8grc
– Tim Swanson (@ofnumbers) 24 August 2018
There is no single statistic showing the energy consumption of the bitcoin network. No one keeps track of the bitcoin's real-time energy consumption.
Instead, to calculate this figure, Swanson examined the hashrate of the bitcoin network, which is about 50,000,000 of terahashes.
This is the equivalent of 3,846,000 S9 or more 3 million S9.
Swanson admits that not all miners use the S9. However, it is the most common miner available today, so it provides a good approximation for energy consumption on the bitcoin network. Other miners may be more or less efficient, but they have a power comparable to that of S9.
The vast majority of miners are left running 24 hours a day, 7 days a week. The S9 draws about 1500 watts. Swanson has multiplied 1500 watts for 24 hours a day to get an approximation of 36 kWh per car per day. When multiplied by the number of S9 protecting the network, we obtain:
- 138.4 million kWh of energy consumption on the bitcoin network per day
- 50.5 billion kWh per year  If you check the list of countries for energy consumption, you will find that it puts bitcoins in the top 50.
Swanson admits that this is a lower limit because it does not include other extraction costs. Miners pay more than just the electricity consumption of their miners, for example. They also need to cover cooling costs. Some older miners are also very inefficient and these miners consume more electricity because of subsidies that a mining farm could receive.
When these costs are considered, the energy consumption of bitcoin increases significantly. A study by PWC researchers this month showed that bitcoin mining uses more energy from Austria
. Austria is a country that generates $ 415 billion a year in economic activities. Bitcoin, meanwhile, has processed about $ 70 million of payments in June. Here's what Swanson said on Twitter:
you do not have to be a hippy tree hugger (they are not) to clearly see that a working test blockchain (like Bitcoin and its derivatives) currently consume far more resources than they created .
and yet this mathematics is waved by hand by coin lobbists.
– Tim Swanson (@ofnumbers) 24 August 2018
Swanson expanded on his discussion on Twitter in a recent post on his official website, OfNumbers.com. In that blog post, Swanson examined the electricity consumption of bitcoins, Bitcoin Cash, Ethereum, Litecoin and Monero. These coins represent some of the most popular working proof coins (PoW) in the world.
Are the trials of the work fundamentally wrong? Let's have a look at the Swanson analysis.
Bitcoin Cash energy consumption (BCH)
Bitcoin Cash energy consumption is similar to the bitcoin network. Both networks use the same hash function as SHA256, which is why miners mainly use the same equipment to extract BTC and BCH.
The hashrate of the BCH network has gone from 4 to 4.5 exahashes last month, or 4.25 exahashes. When you do the math – similar to the BTC math above – you get a total of 327,000 S9 that do the BCH mining while consuming 1080 kWh a month. This provides 11.77 million kWh of energy consumption per day or 4.30 billion kWh of energy consumption in the year
. This places the BCH network between Moldova and Cambodia in terms of annual energy consumption, at 124th place in the list of energy consuming countries.
Does BCH generate sufficient value to justify its cost? Cambodia has an annual GDP of $ 22 billion while Moldova has an annual GDP of $ 8 billion. BCH, last year, has processed between $ 4 million and $ 10 million of commercial payments each month.
Energy Consumption Ethereum (ETH)
Swanson has done similar mathematics with the Ethereum network. It estimated that there were 10 million GPUs that were excavating on Ethereum. Yes, Ethereum ASICs have become more popular this past summer, but most of the Ethereum extraction continues to occur with GPUs.
Although it is assumed that every miner is using the most efficient Ethereum miner, Innosilicon A10 will be released next month, get a daily energy consumption of 12.6 million kWh consumed by 618,557 A10 machines.
When managing the numbers, an annual energy consumption of 8.65 billion kWh is obtained, placing Ethereum in 100th place in the list of the countries that consume electricity between Guatemala and Estonia. Guatemala generates about $ 72 billion a year in GDP and Estonia generates $ 26 billion
It is difficult to estimate the economic benefit of Ethereum. Ethereum was not designed to be a global payment platform. Instead, it was designed to be a global supercomputer. Nevertheless, Swanson believes it is unlikely that the Ethereum network is generating equivalent economic activities to Guatemala or Estonia. "
Litecoin (LTC) Energy Consumption
Litecoin was built on the basis of the original bitcoin. Today, most Litecoin mines are run with L3 + or L3.
Swanson, in his analysis, assumed that the miners used the L3 + to extract Litecoin. Based on this analysis, a single L3 + will consume 19.2 kWh per day, which means that 600,000 miners will consume 11.5 million kWh per day. This gives a total of 4.2 billion kWh per year, which is about the same amount as BCH.
The energy consumption of the LTC places it in the same position as BCH: between Moldova and Cambodia.
Litecoin has a daily volume of transactions, but again, it is unlikely that the benefits are anywhere close to the benefits provided by the GDP of Cambodia and Moldova.
Monero (XMR) Energy Consumption
Monero mining, like the mining of Ethereum, is dominated largely by the GPUs. Monero made headlines at the start of this year to introduce an ASIC-resistant change, preventing large-scale miners from dominating the network as we saw with BTC and BCH.
The Swanson analysis revealed that the hashrate of the XMR network is about 475 MH / S. A single Vega 64 generates about 2,000 hashes per second. If we assume the equivalent of 237,500 Vega 64s and each Vega 64 consumes 3.84 kWh per day, Monero's extraction consumes 912,000 kWh of electricity per day and 332 million kWh per year.
This places Monero's energy consumption somewhere between Haiti and the Seychelles. Haiti generates 8.4 billion dollars in GDP in the year, while the Seychelles have a GDP of 1.5 billion dollars. The volume of Monero transactions remained unchanged compared to last year and the economic impact of Monero is much lower than in both countries.
Ultimately, Swanson's analysis compares the efficiency of PoW networks in terms of value creation. His analysis shows that countries are getting much better "value" from their energy consumption than PoW networks such as BTC, BCH, ETH, LTC and XMR.
Bitcoin miners spend an extraordinary amount of electricity to extract bitcoins, but they generate significantly less value than comparable countries. The energy consumption of Bitcoin, for example, is similar to the country of Austria. The GDP of Austria is $ 386.4 billion USD per year. Bitcoin, meanwhile, processes about $ 70 million transactions a month or $ 840 million a year. It's not even close! We see similar numbers for other cryptocurrencies.
You can read the complete analysis of Tim Swanson here.