Research: mining bitcoin is much less energy-intensive than gold mining

There is an opinion that mining of bitcoin is detrimental to the environment, as it allegedly requires huge volumes of energy. A lot has been written and said on this subject, and the essence is simple: in absolute categories, the energy store is extremely energy-intensive. However, if you believe the analysis of the long hash, carried out by Vladimir Dzhelisavic, the mining of bitcoin is much less energy-intensive, compared to mining (mining) of gold.

To estimate the amount of energy consumed by bitcoin, Jelisavicic uses two methods of rough estimation: an approach that can be designated as "top-down" and a bottom-up approach, which is explained by the nature of bitcoin as a decentralized network with millions of miners and a lack of structure , which would be engaged in assessing the amount of energy consumption.

Within the framework of the "top-down" approach, rewards for the block are used as prerequisites for estimating the amount of energy consumed. In the report of the researcher it is said:

"Whenever a new block is created, the miners receive 12.5 bitcoins. Assuming that the blocks share time intervals of 10 minutes, it turns out that every hour the miners earn about $ 562,500 (12.5 x $ 7500 x 6). If the miners were spending 30% of that amount ($ 562,500) per hour to buy electricity, how much would they buy? The answer contains an estimate of the amount of energy consumed. Electricity prices vary considerably, but we can assume that for the end user it is about $ 100 per MW. To support the blockade of bitcoin, approximately 1.688 megawatts goes. "

Under the bottom-up approach, the size of the hash is used as a prerequisite for estimating energy consumption. At the same time, it is assumed that each miner uses the latest Antminer S9 model, which processes 14.5 terrays per second. As it was said in the report:

"This means that to support the battle of bitcoin requires the equivalent of 3.45 million units of Antminer S9. S9 consumes 1.650 watts; accordingly, 3.45 million devices will consume 5.693 MW. Let's start at 5,693 and assume that the older mining equipment is about 25% less efficient than S9, implying that about 7,000 MW is currently required to support the lock-up. "

If we average 1.688 MW using a top-down approach and 7000 MW using a bottom-up approach, we estimate the cost of the total energy consumption of bitcoin at about 4.344 MW.

Now let's consider the amount of energy consumption by the gold industry. The author uses in these calculations the data on Barrick Gold Corporation (the world's largest gold mining company).

Based on the figures from Barrick's annual report, the author comes to an estimate of energy consumption of $ 6 billion, and the total cost of electricity consumed annually is estimated at $ 87.3 billion. He then summarizes the two indicators:

"Summing up, say, $ 6 billion of direct energy consumption is about 92 million barrels per year ($ 6 billion / $ 65 barrel). This means that the direct cost of energy inputs to the gold mining industry (diesel fuel) is approximately 0.27% of the world's oil consumption. In comparison, bitcoin consumes only 0.07% of the world's total electricity. "

Some well-known personalities commented on Jelisavicic's calculations. So Joseph Yang on September 14 wrote :

"Yes, the annual cost of mining bitcoin is $ 4 billion, while the" mining "of gold costs $ 80 billion annually. Since the mining of bitcoin does not simply increase its stock but confirms its transactions and payments, it is worth comparing the cost of mining bitcoin with the cost of gold mining + work of clearing organizations ».

John Lilich, a member of the studio for the development of the etherium of ConsesnSys, joined the discussion, speaking on the difference in the nature of energy consumption of the two assets:

"The real question is really whether the low efficiency of energy efficiency in the cryptosphere really justifies the benefits, such as the storage of assets. I am convinced that he justifies! It's worth it, but only if our sector makes its priority the desire for energy efficiency of profit, which provides proof of the share of ownership. "

Although the analysis extends to traditional non-renewable sources of energy, do not forget that attempts are being made to use renewable energy sources in mining , which will make the process environmentally friendly.