Cryptocurrency mining has emerged as one of the most captivating yet challenging investment globally. The most popular cryptocurrency, Bitcoins, is a decentralized virtual currency that uses cryptography to secure its transactions.
It is an alternative form of payment that promises lower transaction fees. All Bitcoins transactions are stored on a public ledger, making them transparent to everyone. Cryptocurrency’ rising popularity continues to raise concerns about the high amount of energy bills for crypto mining which adds to the growing climate crisis.
Is crypto mining energy-intensive?
Cryptocurrency mining is an enormous energy-intensive process that generates a massive carbon footprint. The most frustrating thing is that high-energy input is a feature of crypto mining. The mining technology used consumes a lot of energy to unlock a single bitcoin, making cryptocurrency mining an environmental disaster. Compared to internet browsing, crypto mining consumes more power. When a Bitcoin transaction is made, computers worldwide race to complete a complex computation to generate a hexadecimal number for the digital currency.
A public ledger is used to confirm a transaction’s legitimacy. The first computer to solve the problem gets a reward of around 6.2 bitcoins. For instance, graphic cards typically work for up to 24 hours daily for starters. A three-GPU rig can consume up to a thousand watts of power while running.
Crypto mining centers can have hundreds or thousands of rigs in a single location. One of such centers in Kazakhstan runs 50,000 mining rigs. Besides, rigs generate a large amount of heat. The heat is directly proportional to the number of rigs. Cooling is, therefore, necessary to avoid the melting of rigs. Mining centers need a lot more cooling, requiring even more electricity.
Is crypto mining profitable?
The electricity cost to power the mining machines and the availability and cost of the mining machines are the significant factors that determine whether crypto mining is profitable. Before prospective miner decides to purchase a mining rig, they should carefully consider the cost-benefit analysis of the equipment.
This analysis involves taking into account various factors such as power consumption and the Bitcoin value. The Bitcoin Energy Consumption Index revealed that it takes 1,544 kilowatt-hours to complete one Bitcoin transaction. One transaction generates over $200 in energy bills. Considering that 6.2 Bitcoins have a value of about $225,000, crypto mining is a profitable investment.
Amount of power consumed to mine a Bitcoin
High energy usage in Bitcoin mining continues to strain the already scarce fossil fuels reserves. With S19 pros, around 86,509 kWh is required to generate each Bitcoin, which is equivalent to or 0.0865 gigawatt-hour (GWh) or 86.5 megawatt-hours (MWh). Additionally, the network is made up of lesser-efficient machines that leads heavy power usage.
This means that the total power consumption of Bitcoin mining is slightly higher than previously thought. The network efficiency of an ASIC model is 48.7 W/TH on average. This means that mining of one Bitcoin consumes 142,498 kWh. This amount is equivalent to 142 MWh or 0.142 GWh. It takes around 86,000 to 286,000 kilowatt-hours to mine one bitcoin. The Bitcoin network consumes approximately 128 gigawatt-hours per day to process 900 Bitcoins.