BTC Consumes 7 Nuclear Power Plants Worth of Electricty
I’ve written about this topic in the past. Energy usage for Bitcoin represents it’s primary weakness. The energy demands act as a barrier of entry to the mining operation, as mining Bitcoin requires vast sums of capital to be invested in machines and energy consumption. Thus to even begin a mining operation, you need capital. This trigger further centralization and monopolization. Wealth begets wealth, and capital is accumulated.
As an example, check out the money that Riot Blockchain, a BTC mining firm, put up for 5,100 Bitmain S19 Pro Antminers recently: $11.2 million. This is in addition to $17.5 million for 8,000 S19 Pros on August 24. This is in addition to vast sums already invested.
It is no coincidence, then, that Bitcoin’s mining is so centralized into the hands of a few massive operations. This is a rule of money. But this requirement of massive sums of capital to invest and mine Bitcoin is also what gives Bitcoin its inherent value. By value I don’t mean use-value, which is generally a means of hedging bets against fiat inflation. By value I mean the actual value imbued in Bitcoin, as exchange value. Just as gold gets its value due to rarity, which actually means not just “having little of it available” but “massive amounts of money is needed to find and mine gold, and thus, the cost of labor involved in it is high, so the gold itself that is produced from the mining process is incredibly expensive”.
So, we all love high prices for BTC. Removing the buying and selling pressure, the base-level of value of BTC is determined by its cost of production. And there’s a good article put up recently by an engineer that discusses this energy cost.
BTC mining uses more energy than Austria, a little less than Colombia. 6.0 GW.
One point I liked was addressing this fallacy of BTC’s “renewable energy usage”.
"Let’s assume a best-case scenario of 70% renewable. This is still a hilariously bad number in terms of efficiency, especially on such scale. This puts Bitcoin energy usage for solely non-renewable energy between Puerto Rico and Azerbaijan.”
So even if BTC was using 70% renewable energy sources, it would still be consuming as much energy as Azerbaijan. And note, that BTC would likely never be able to reach 100% renewable energy sources because, with today’s level of energy output by renewable sources, there simply isn’t enough. The largest wind farm in the USA only generates 1.5 GW.
China seems to be cracking down on the obvious bloated energy usage by BTC mining.
These businesses make deals with the Chinese government for reduced energy rates, making their production process cheaper. China essentially provides subsidies to BTC. This may end soon, causing an increase in the price.
Another article puts the total energy cost of BTC mining at 9.6 GW.
50% of this is in China, China runs extensively on cheap and toxic and dirty coal power. The amount of power that the entire network consumes is more than seven nuclear power plants. As the world moves towards further regulation of energy consumption in the face of climate change. This can't go on forever. BTC cannot continue to just indefinitely consume the world's electricity. There will be a movement by governments to regulate the industry and limit the power consumption, and this will effect the security of the network.