For everyday cryptocurrency investors, it’s not essential to know how your coins came to be in existence. All that matters to many people is that you can purchase them for a low price, play the long game, then sell it for a higher price. However, how each coin comes into existence could become the general public’s problem if the mining processes continue to be a drain on the world’s energy resources.
According to Digiconomist Bitcoin Energy Consumption Index, the cryptocurrency mining process uses close to 54 TWh of power – enough to power Bangladesh for one year, or five million homes in the United States. While mining for coins generates almost eight and a half billion dollars around the world every year, it uses $2.7 billion worth of electricity to do so. What’s more, mining just one Bitcoin takes 788 kWh of power, enough to power 27 homes and can come at the cost of $9,483 if you were to mine it in Hawaii.
Such is the severity of the problem that by 2020, it is thought that mining will double the amount of power the world consumes. Herein lies the problem: the world cannot produce twice as much energy in this timeframe.
The mining process is complicated and takes a skilled user to be able to complete it. The miner uses computer processing power with a CPU or GPU, sometimes even both, to secure the digital currency cryptographically. However, to save time, money, and to get more currency at a higher rate, miners can tie several GPUs together and join as a community. The downfall, however, is the increased power usage.
The power draw from communities of miners can be so severe, and the drain on the local grid that dramatic, that Plattsburgh in New York has banned mining in city limits due to the strain on the grid.
How can we save power?
The demand for cryptocurrency is ever-growing, and more and more people are skilling themselves in how to mine for them successfully. Therefore, the power problem may only get worse, rather than better. However, as computer manufacturers catch on to what their users require, advancements and developments are already being made to ensure the process is as efficient as possible.
GPU cards are being manufactured with higher energy efficiency, and this equates to being able to process more data while using less power. What’s more, leading companies such as Samsung and Obelisk are now working on mining hardware that can outperform standard computer equipment while improving energy efficiency at the same time. As mining techniques develop, so too does technology. Therefore, there’s still hope to reduce the power consumption while still contributing to the digital economy.