Mining is the lifeblood of Bitcoin but like any industry, it consumes power to unlock the precious virtual currency.
There are massive mining operations around the world and they are bound to be more popping up in the next few years as Bitcoin and other cryptocurrencies continue their path into mainstream acceptance.
As it stands, Bitcoin mining is a lucrative operation. With the price over $11,000, there is a lot of money to be made. Like any factory, mining rigs use electricity. A lot of electricity.
According to UK based company Power Compare, the surge in Bitcoin price has directly influenced the demand on power supply.
Citing Digiconomist, the combination of Bitcoin and Bitcoin Cash’s estimated annual electricity consumption has climbed to 31 terawatt-hours. They also estimate that Bitcoin mining generates $9.7 bln a year.
They have developed their own Bitcoin Energy Consumption Index, which has provided the most recent data driving these insights.
Bitcoin and Bitcoin Cash mining is using a total of 0.13 percent of the global energy consumption - which ranks the combined mining operation as the 61st highest power consumer in the World.
Interestingly, but not surprisingly, the power consumption of Bitcoin mining in November increased by nearly 30 percent - no doubt linked to the massive bull run.
If the demand for electricity caused by mining continues keeps at its current rate - mining will consume all of the world’s electricity supply by 2020.
As it stands, Bitcoin mining uses more power than most African countries - as shown in Power Compare’s illustration below.
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