How much energy does Bitcoin require?

You hear a lot about Bitcoin these days — how it is or isn’t the future of currency… In the middle of such a discussion recently, the topic of energy usage came up: Suppose Bitcoin did take over — what would the sustainability impact be?

It’s certainly a complicated question, and I don’t think I have a good answer to it yet.  But, a first order question along the way would be: how much energy is required per Bitcoin transaction?  

There’s a nice analysis of this over at motherboard, and the answer it comes to is this: a single Bitcoin transaction uses enough electricity to power ~1.5 american households for a day!   By comparison, a Visa transaction requires somewhere on the order of the electricity to power .0003 households for a day…  

That’s certainly a much bigger gap than I would’ve guessed, and highlights that there would certainly be a lot of energy-efficiency improvement needed if Bitcoin were to grow dramatically!  Of course, it’s not clear whether that would be possible, since the security of the system depends on the difficulty of the computations (and thus large energy consumption).  So, in a sense, the significant energy usage becomes part of the protection against attacks…  I guess there are probably some interesting research questions here.

See the full article for a discussion of how they arrived at these numbers.  It’s a back-of-the-envelope calculation, but a pretty reasonable estimate in my mind.


5 thoughts on “How much energy does Bitcoin require?

  1. A similar conversation came up recently at the electrical utility where I am doing my summer internship. A neighboring utility has been swarmed with power requests for bitcoin mining operations and has put a moratorium on large power requests in response. The power requests are far larger than their normal system growth and no planning has been done for such loads. There is also concern that the mining operations will not last and the cost of upgrades required by utilities to support these operations will be pushed onto the other ratepayers.

  2. i have a feeling that will accept btc, on that way bitcoin price will change a lot. It should and the Ebay integrate the bitcoin as a payment method. In this way while big e-commerce companies include this payment method the price of bitcoin will increase and people will be more interested to invest in bitcoin.

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