«Miners» of bitcoin actually depend on traditional miners, but rather from coal electrodance, which is still a lot in the world. The rapid growth of bitcoin intensely fueled by coal, as many Chinese mining pools rely on coal-fired power plant.
Not all deservedly celebrate the huge success reached by the bitcoin this year. While some financial experts continue to ridicule the cryptocurrency grows another serious problem, which bothers many people. It concerns the energy that is required for mining of bitcoin and support transactions.
Most of the production of bitcoin is in China, today it is 58% of the global production. The United States is in second place with 16%, and the rest of the country accounts for 26%. For mining and bitcoin transaction requires a lot of energy. Annual energy consumption of bitcoin miners approaching 35 terrawatt-hours and continues to rise despite improved technology. For comparison, this energy is enough to provide most countries in Eastern Europe or Africa (taken separately). In addition, the average bitcoin transaction consumes up to 240 kW/h, which is enough to power the average tenement house without electric stoves in one day.
China gets about 60% of its electricity from burning coal, a quarter of global energy used for the creation of cryptocurrency, produced in China. Only eight hangars in Ordos, owned by Bitmain, contain 25 000 ASIC-miners. Their work is fully supported with electricity derived from burning coal.
Miners are doomed?
The huge energy consumption of the bitcoin led to the emergence of panic. Earlier it was reported that mining of bitcoin consumes more electricity than 19 European countries. Meteorologist Eric Holthaus (Eric Holthaus) wrote
for Grist magazine the following:
«By July 2019 network of Bitcoin will need more electricity than currently used by all the United States. By February 2020, it will consume as much energy as today the whole world».
Of course, these panic conclusions technically illiterate as it is based on the forecast of accelerated growth, which will not, and do not take into account the development of technologies of mining. His opponents say that even the high cardinality estimate future consumption in fact account for only about 0.1% of all the energy used in the world. Others say that it will be built more power plants (using different energy sources — nuclear, hydroelectric, etc.), which will increase global supply.
It is also worth considering that there will be improved technology, for example, concerning the supply of power that will make many processes more efficient. Today, there are coal plants that cause much less harm to the environment than before. However, most of these power plants in China are not.
There are several ways by which you can reduce the electricity consumption by the industry of bitcoin. For example, the transition to advanced chip manufacturing process technology, and encourage mining pools to use renewable energy sources. However, it is likely that in this case the production costs of energy would be too great to profit miners. And it’s clear that there is no profit – there is no mining.
So, should we worry about the fact that coal is the main raw material, allowing to obtain the energy for mining bitcoin in China? On the one hand, I want power plant caused the least possible harm to the environment, and China can not boast. On the other, the world has not converged wedge on the Chinese miners, and in the world a lot of idle capacity on a more «clean» power plants — hydro and nuclear. Such excess capacity and projects in Russia.