Recently we’ve heard many Bitcoin deniers criticize the cryptocurrency for its alleged energy wasting. From Guardian to New York Times, many news outlets belonging to the “old establishment” failed to realize why exactly Bitcoin uses as much energy as it does, why that energy usage is good and why it’s not even that wasteful when compared to some other large-scale industries. The issue was recently addressed by Coinshares, popular digital asset management and research platform, who pointed out some of the mainstream misconceptions about Bitcoin mining.
In a study presented in a whitepaper titled “The Bitcoin Mining Network: Trends, Composition, Marginal Creation Cost, Electricity Consumption & Sources”, members of Coinshares Research and Three Body Capital investigated geographical distribution, composition, efficiency, electricity consumption and electricity sources, trends in hash rate, hardware costs, hardware efficiency and marginal creation costs of the Bitcoin mining network.
The study goes on to explain that while Bitcoin mining certainly isn’t a low energy ordeal, it ultimately comes out much greener than almost every other large scale industry on the planet. It also found that most of the mining (77%) is done in areas with large, unused supplies of renewable energy, meaning that the practice isn’t as big of a waste as some news outlets claim it to be.
Among other things, the study compares and contrasts Bitcoin mining against gaming:
“While we find the notion of attacking a value-creating industry based on its consumption of electricity freely purchased by willing sellers in the open market rather absurd, if one nevertheless was to embark on such a spurious line of argumentation we humbly suggest efforts might be better directed towards other applications of electricity. For example, there are approximately 85m PlayStation4, 40m Xbox One and 15m Nintendo Wii U consoles distributed among global households. Their weighted average gameplay power draw is approximately 120W. Assuming they are played on a modern 40’’ LED TV drawing only 40W, for 4 hours a day, and idling for 20 hours a day, at a weighted average of 10W, these gaming systems alone draw more power (4.9GW) than the entire Bitcoin mining network (4.7GW).”
You can check out this interesting study in full here.