Researchers have shown through a peer-reviewed article that bitcoin mining and its network consume a whopping 2.55 gigawatts that is equivalent to electricity consumption of entire Ireland.
The research by Alex de Vries makes use of novel methodology to determine Bitcoin’s energy usage a few years from now. According to the paper, that makes use of complex economic models, coupled with publicly available electricity costs and mining statistics, there will be more than the jump in electricity consumption to 7.7 gigawatts by end of the year.
According to de Vries, the current electricity consumption for bitcoin mining and maintaining the core network is half a percent of the world’s total electricity usage.
Furthermore, every transaction via the Bitcoin network uses up enough electricity to power an average home in the Netherlands.
The huge costs associated with Bitcoin mining has been a subject of criticism since years. And with the increase in the network’s size, the costs are further poised to grow, possibly consuming 5 percent of the world’s total electricity in the future.
De Vries notes:
You are generating numbers the whole time and the machines you’re using for that use electricity. But if you want to get a bigger slice of the pie, you need to increase your computing power. So there’s a big incentive for people to increase how much they’re spending on electricity and on machines.
Applying economic principles to the Bitcoin protocol highly suggests the network reaching a point of equilibrium, which would see the miner’s bitcoin incentives become equal to the computing, hardware, and electricity costs involved.
With that in mind, de Vries extrapolated present data to that of the equilibrium point, to determine electricity costs and economic implications in running the Bitcoin network during that period.