Bitcoin has broken yet another record, having steadily risen in value throughout 2017. On Thursday, November 2, its price rose above $7,000 for the first time, peaking at $7,355.35.
As a result, the total market value of all cryptocurrencies hit $189 billion for the first time, according to CNBC. Bitcoin alone comprises some $121 billion of that amount.
Not only is the value of the cryptocurrency surging, but so too is the amount of energy needed to “mine” these “coins.” In fact, as per an index from cryptocurrency analyst Alex de Vries, otherwise known as Digiconomist, Bitcoin miners could use more than 24 terrawatt-hours of electricity every year to mine more Bitcoins. How much energy is that? About the same amount that the country of Nigeria (which has 186 million people) goes through in a year.
To put it differently, this means that miners use 215 kilowatt-hours of energy for every single Bitcoin transaction. And given that the average household in the U.S. uses about 901 KWh per month, each Bitcoin transfer effectively requires the same amount of energy to comfortably run a house and all its appliances for about a week. In fact, at any given time, it’s now suggested that bitcoin miners are using enough electricity to run about 2.26 million American homes.
Bitcoin has been surging over the last several months. The value of the cryptocurrency passed $4,000 in August, then broke the $6,000 mark in October. It’s an incredibly exciting time for investors, but the question is when this upward motion will begin to tail off.
We’ve seen various different competitors enter the arena, from promising alternatives like Ether, to forks of Bitcoin like Bitcoin Cash. Despite this, Bitcoin remains bullish, thanks in no small part to the fact that it is a known quantity.
Cryptocurrency is still a very new concept and it has yet to reach the mainstream in any significant sense. Some retailers are starting to accept Bitcoin but they are still in the minority at this point in time.
Since Bitcoin is seemingly on the up-and-up, and shows no signs of slowing down, it might be tempting to try to get in while the going is good. However, it’s far from a safe bet. It’s still very difficult to project what the future might have in store.
There are big questions to be asked about the legal status of Bitcoin as well. The cryptocurrency is founded on a decentralized platform, which could be undercut if governments start to introduce restrictive legislation. And its value could potentially fall just as quickly as it has risen if key markets enforce new regulations that affect its usage — and since the field has become very crowded, a rival coin could perhaps take its place at the top of the tree.
Still, it seems that the Bitcoin success story is set to continue, at least for the time being. It’s probably too late to get started as a miner unless you have a high-spec system that is not being used for anything else, but if you bought in years ago when cryptocurrency was still a novelty, you might have a significant return waiting for you.
Update: As Bitcoin prices surge, so too does the amount of energy required to mine for more coins.