Alex de Vries, a blockchain specialist at PWC and founder of Digiconomist, gave a damning assessment of the electricity consumed by Bitcoin (BTC) mining.
According to de Vries remarks, in an interview with British media outlet The Telegraph, a single Bitcoin transaction expends the same amount of electricity needed to power a British household for 59 days, 780,650 Visa transactions, or 52,043 hours of video streaming on Youtube.
Bitcoin Miners Generated $14bln Profits
The article claims that the annual returns generated from Bitcoin mining are nearly $5.9 billion, with around 4 billion mining units competing worldwide for a share of the bounty. Since the technology’s inception, Bitcoin miners have been estimated to have generated $14 billion in profits at the end of August 2019.
De Vries claims that 98 percent of mining rigs will never verify a transaction, resulting in huge and unproductive expenditure on electricity. “They’re kind of participating in a massive lottery and one gets lucky every 10 minutes and gets to make the next block,” he states.
“The shocking thing is the average lifetime of a bitcoin mining machine is one and a half years, because we have a new generation of machines which are better at doing these calculations. That means it’s impossible for 98 percent of the devices during their lifetime to make the calculation that actually results in a reward. So the rest are just running pointlessly for a few years, using up energy, and producing heat, and then they will just get trashed because they can’t be repurposed. It’s insane.”
The calculations of De Vries are derived from the Bitcoin Electricity Consumption Index (BECI) by Digiconomist, which shows that Bitcoin’s power consumption has recently broken into record highs.
According to BECI, Bitcoin mining currently consumes approximately 77.78 terawatt-hours per year— approximately equal to that of the whole country of Chile, exceeding that of the Czech Republic by 13.9%. The index, however, also provides a minimum estimate of about 50 terawatt-hours per annum — equal to that of Romania.