Today’s cryptocurrencies are worth a great deal of “real” money. Both Bitcoin and Ethereum, the two most widely adopted cryptocurrencies, are close to their all-time highs in value, and that’s creating some real consequences that might not be completely obvious and intuitive at first glance. Two such consequences are based entirely on the fact that mining cryptocurrency is incredibly compute-intense and requires powerful components to be profitable.
The first such impact has been to devastate the supply of the midrange and high-end GPUs that are used for mining and to dramatically increase their prices if available inventory can be located. The other impact is that the use of ultra-powerful mining systems with multiple GPUs sucks down some serious electricity and is resulting in some pretty impressive statistics, as Digiconomist reports.
According to Digiconomist, Bitcoin and Ethereum mining taken together consume more power than countries like Jordan, Iceland, and Syria, with the two combined ranking 71st among all countries. This is based on Ethereum mining consuming 4.69 terawatt-hours (TWh) of power and Bitcoin mining consuming 14.54 TWh.
It’s also interesting to note how Bitcoin and Ethereum mining compares in power consumption to the largest traditional financial services company, Visa. According to this statistic, the number of U.S. households that could be powered by the electricity consumed by Bitcoin mining alone exceeds a 1.25 million. Another way to look at it is that roughly 27 times as much energy is consumed by Bitcoin mining as is consumed by the entire Visa network.
Finally, Bitcoin is far more power intensive than Ethereum when looking at a single transaction, at 163 kilowatt-hours (KWh) versus 49 KWh. That means that a single Bitcoin transaction could power the typical U.S. household for roughly 5.5 days as compared to the 1.5 days of a single Ethereum transaction.
Given that cryptocurrencies could potentially continue to rise in value, it’s likely that these statistics will continue to rise as well. Ethereum is working to alter its proof-of-work algorithm to reduce energy consumption, which would reduce the load on the electrical grid. However, Bitcoin is more amenable to industrialization while Ethereum mining favors GPU-based systems. That means that you have Ethereum to blame for your difficulty in buying that new GPU, while Bitcoin is more likely to put more of a burden on your local electric company.
- What is an ASIC miner?
- How to mine Bitcoin
- How to measure home energy use
- Passing the $1 trillion mark, Bitcoin is almost as big as Google
- How to buy Bitcoin