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Tuesday, December 6, 2022

Bitcoin Network Power Consumption Drops By 14%

After plummeting in June, the price of Bitcoin has remained at such a low level that it is causing the blockchain’s high power consumption to do the same. According to estimates of yearly electricity use published on the website digiconomist.net by digital currency economist Alex de Vries, Bitcoin’s energy use has decreased by more than a third during the last several weeks.

The process of mining new tokens is what causes Bitcoin’s energy consumption, which has concerned environmentalists and consumer groups concerned about pollution and electricity bills. By verifying payments through an intrinsically energy-inefficient process, and utilizing specialized equipment to solve challenging problems, BTC miners generate new tokens. The amount of computation done by all those devices has resulted in energy consumption that rivals that of whole countries.

Bitcoin Price Continues To Drop

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From roughly 204 terawatt-hours (TWh) per year on June 11 to about 132 TWh per year on June 23, Bitcoin’s yearly energy usage has decreased. Although its power use has decreased, it is still extremely high and is about equal to Argentina’s annual electrical consumption.

The value of the BTC network determines how much energy it requires. The more valuable it is, the greater the incentive for miners to increase production—possibly by investing in new equipment. In November 2021, the price of BTC reached a pinnacle, peaking at over $69,000. Since that high point, de Vries calculated that the blockchain used between 180 and 200 TWh of power annually. That about equals the annual power consumption of all data centers worldwide.

Since the price of bitcoin has been down for months, there has not been a noticeable decrease in energy use. According to studies de Vries released last year, the BTC network can support mining operations that suck up around 180 TWh yearly if the price stays over $25,200. Since miners have already invested in their equipment, they will probably continue to use it as long as they can continue to generate a profit on certain profitable currencies.

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