The process of mining the most popular of the virtual currencies, Bitcoin, currently consumes 62 Terawatts hour. According to the Cambridge University consumption index (CBECI), this figure is 60% lower compared to its historical peak. Thus, during the past month of May, consumption reached 143 Tw / h.
This decrease corresponds to the sharp fall of the hashrate after the massive disconnections in the People’s Republic of China. Since March, the Asian country has taken a series of measures to ban the Bitcoin mining process within its borders. It should be noted that, until that time, in the Asian nation, approximately 65% of all the hashing power of the pioneer cryptocurrency was concentrated.
As punitive measures against the miners came into effect, consumption fell to levels at the end of November 2020. Now, the process of generating the cryptocurrency, consumes considerably less energy. It also reduces the potential for carbon dioxide emissions into the atmosphere. The latter is the main point of attack of the detractors of cryptocurrency.
Bitcoin mining takes a step back in energy consumption
The fact that Bitcoin mining now consumes less energy, could be related to another additional factor mentioned above. The new connections are made with more efficient equipment in terms of consumption. In other words, the increase in hashing in the West has lower proportions than at other times due to the low consumption of new ASICs.
In that sense, the aforementioned Cambridge consumption index establishes that the decrease in efficiency has fallen from 47 to 24 TW / h. This is a trend that became one of the most common arguments of Bitcoin defenders in the face of criticism.
The truth of the matter is that, at least right now, the amount of energy that supports the Bitcoin network is considerably less. At the same time, this is expressed in the hash/consumption formula. For example, since mass disconnections began, the computing power of the network has decreased by 40% to 50% from its all-time high.
At the same time, consumption has fallen 60% on the same scale, which suggests that efficiency plays an important role. These numbers do not include the energy consumption of mining-related processes that do not directly influence hashrate. Among them, the use of extractors could be highlighted, to name one of them.
Mining process becomes more environment friendly
An important factor related to the drop in the amount of energy that Bitcoin mining consumes, is its environmental impact. As already highlighted, this has been the main “Achilles heel” of the business. So much so, that criticisms of the environmental impact, have cost the pioneer cryptocurrency the fall of more than 50% of its value.
At the beginning of the year, the price per coin of Bitcoin was close to $ 65,000 US dollars. After Tesla CEO Elon Musk took action from his company alluding to the environmental impact of mining, the price plummeted. Thus, at the time of writing, the market value of Bitcoin stands at $33,360.
However, the decline in consumption has some positive interpretations. The first of these is that Bitcoin mining is deconcentrated when leaving China, giving greater strength to the network. Similarly, some provinces that were” cleaned ” of miners, have electricity powered by coal. The latter means that much of the polluting mining is inactive.
Greenhouse gas-emitting mining farms are in the process of moving to renewable energy sites. Among these sites, the United States stands out. In the city of Miami, for example, Mayor Francis Suarez offered Chinese miners to establish themselves with 100% renewable energy.
Hashrate recovery with less consumption
This context opens the door to the solution of two important problems in the field of Bitcoin mining. The first is the considerable reduction of greenhouse gas emissions. The second is that the consumption will be lower with the efficiency of the new equipment.
Consequently, the recovery of hashrate to pre-ban levels in China is expected to occur in the medium term. On the other hand, the level of consumption will not grow according to this increase in computation.
These numbers, they leave Bitcoin mining well stopped as a business. Even so, it should be considered that, even at the peak of consumption, the activity represented a very small share of consumption and pollution compared to other sectors.