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The SHA256 hashrate protecting the Bitcoin network has grown tremendously in recent years, as Bitcoin’s processing power hit an all-time high in 2020. Furthermore, the gigawatts of electricity consumption that power industrial bitcoin mining today consume up to seven nuclear power plants.
Bitcoin mining is a process where groups of miners compete to acquire as many rewards as possible in bulk. Bitcoin miners essentially plug electricity-consuming machines into the wall to eliminate the consensus algorithm of the Bitcoin network so they can outrun competitors. Hashrate is how analysts measure the amount of computing power dedicated to the blockchain network.
Basically, ASIC mining machines that produce higher hashrate values than others will get more BTC through mining. In 2020, there are now extremely large facilities and warehouses filled with thousands of ASIC mining rigs. Additionally, lone miners working in remote areas of the world typically join a mining pool so they can merge their hashrate together to collect more bitcoins.
Collectively, the aggregate total of all bitcoin miners combined makes up the total amount of hashrate devoted to the blockchain. Today the hashrate of the Bitcoin network (BTC) is around 120 exahash per second (EH / s).
Analysts don’t know exactly how much electricity is being consumed to power the entire grid. But the researchers were able to come up with a very accurate estimate of the amount of electricity consumed and the average price miners pay per kilowatt hour (kWh).
For example, the results of the Tokeninsight 2020 mining research and the Cambridge Bitcoin Electricity Consumption Index (CBECI) show that on average this year miners are paying between $ 0.03 and $ 0.05 per kWh. Estimates also indicate that as of the end of March 2020, the cost of mining a single bitcoin (BTC) is around $ 7,577.51. At current exchange rates, this offers miners a profit margin of approximately $ 4,184 on Monday, August 24th.
However, another estimate from the Bitooda mining report released in July states that the cost to produce a single BTC is around $ 5,000. Bitooda researchers think the BTC network’s hashrate could exceed 260 exahashs per second over the next year and a half.
“According to our assessment, the Bitcoin network can exceed 260 EH / s in Hashrate in the next 12-14 months,” notes the report released on July 15, 2020. “Driven by a modest increase in available power capacity from 9.6 at 10.6 GW and an upgrade cycle that will replace older generation S9 class rigs with newer S17 class rigs and next generation S19.
The Cambridge Bitcoin Electricity Consumption Index (CBECI), produced by the Cambridge Center for Alternative finance, attempts to estimate the amount of energy consumed by mining bitcoin. Today, the CBECI says the power consumption of the Bitcoin network is greater than seven gigawatts (GW) of electricity.
CBECI on Monday indicated that there are 7.46 GW running on the BTC network which equates to approximately 63.32 TWh or terawatt-hours of power consumption. The amount of energy consumed by bitcoin miners is equal to more than seven nuclear power plants or 21.8 million photovoltaic (PV) solar panels.
The BTC network is as powerful as 2,884 industrial-scale wind turbines or 9.1 million horsepower (horses) of energy.
For example, mining facility operator Enegix told financial technology editorial Paddy Baker last week that the company was due to launch a large mining facility in Kazakhstan with 50,000 ASIC devices.
Baker’s story reckons the operation would power 180,000 U.S. homes, but calculations from news.Bitcoin.com indicate the Kazakhstan plant would power only 90,000 U.S. homes. This would mean that the entire BTC network could power 2.25 million US homes according to CBECI data.
The Cambridge mining map shows that China commands 65.08% of the global hashrate, but this estimate may not be correct. In July, Bitooda researchers say Chinese miners account for only 50% of the network, and the US increased their game to 14%.
In contrast, the Cambridge mining map indicates that the US commands only 7.24%, Russia 6.9%, Kazakhstan 6.17%, Malaysia 4.33% and Iran captures 3, 82% of the SHA256 hashpower. The mining map exploits the geolocation data (IP addresses) of the miners connected to the main mining operations.
More than a decade ago, Bitcoin creator Satoshi Nakamoto, the inventor who allegedly mined the first 18,000 blocks on a single high-end computer workstation, predicted the tremendous growth the network handles today.
“In the beginning, most users were running network nodes,” Nakamoto wrote on November 2, 2008. “But as the network grows beyond a certain point, it would increasingly be entrusted to specialists with specialized hardware server farms. . A server farm should only have one node on the network and the rest of the LAN connects to that single node, “added Nakamoto.
What do you think about the current energy consumption of the Bitcoin network in 2020? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Cambridge Bitcoin Electricity Consumption Index (CBECI)
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