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Bitcoin Power Consumption Almost Equal To A Country's Total Use

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The crypto frenzy that has taken the world by storm is costing the power resources dearly.

The Bitcoin network is consuming around 2.55 gigawatts of energy annually, which is 0.5 per cent of the world's total electricity consumption, a study has found.

Interestingly, that's nearly enough to meet the demand for power of a country - Ireland.

In the future, the Bitcoin network could be using almost triple that amount, or 7.67 gigawatts, according to a letter published in the energy journal Joule by financial economist and blockchain expert Alex de Vries.

A look at Bitcoin miner production estimates suggests that this number could already be reached in 2018, says Vries, who works at PwC in the Netherlands.

Bitcoin network processing just 200,000 transactions per day, means that the average electricity consumed per transaction equals at least 300 kWh, and could exceed 900 kWh per transaction by the end of 2018, the study estimates.

The Bitcoin development community is experimenting with solutions such as the Lightning Network to improve the throughput of the network, which may alleviate the situation. "For now, however, Bitcoin has a big problem, and it is growing fast," according to Vries.

The electricity that is expended in the process of mining Bitcoin has become a topic of hot debate. It is a process that makes Bitcoin extremely energy-hungry by design, as the currency requires a huge amount of hash calculations for processing financial transactions without intermediaries.

Digital currencies require a continuous flow of power to keep the network up and running round the clock. It is estimated that for crypto mining process, computers consume more than 50 terawatt-hours of electricity per year globally.

And if the current growth rates of electricity consumption continues, experts predict that by 2020 the bitcoin network can consume electricity as much as the rest of the world utilize. Also, a large amount of heat is emitted due to mining, which also contributes to global warming, though marginally.

Several incidents of electricity being stolen or abused for cryptocurrency mining have been reported recently.

In one case, a researcher misused National Science Foundation-funded supercomputers to mine $8,000-$10,000 worth of Bitcoin. The operation ended up costing an American university $150,000.

More recently, a mining facility in Russia with 6,000 devices was shut down after not paying for several million kilowatt-hours of electricity.

But in the wake of increasing interest in crypto trading worldwide, cryptocurrency mining doesn't seem likely to slow down anytime soon. Researchers need concrete answers before it becomes far too late enact institutional restrictions and regulations on the practice, writes De Vries.

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