Bitcoin Energy Consumption Index estimates the cost of annual bitcoin mining to be 32 Terawatt*Hour.
Their methodology for the estimate can be summarized as follows:
- Calculate total mining revenue based on current Bitcoin price
- Assume that 60% of revenue will be spent on electricity
- Estimate how much 1 Kilowatt*Hour of electricity cost miners
- Calculate the total cost
On December 5, 2017, the estimate for annual energy consumption was 32 Terawatt*Hour.
Let’s say an average car drives 12,000 miles per year, with average fuel efficiency being 20 miles per gallon, resulting in
12,000 miles / 20 miles per hour = 600 gallons of gas being consumed by a car per year. One gallon of gas generates about 33.41 Killowat-Hour. Hence an average car consumes about
600 gallons * 33.41 Kilowatt-Hour = 20046 Killowat-Hour, in a given year.
Let’s assume Bitcoin price will stabilize at 32T TerawattHour per year or 3.2e+10 KilowattHour.
Which is like putting
3.2e+10 Kilowatt*Hour / 20046 Killowat*hour = 1,596,328 more cars on the road.
Most of Bitcoin miners currently located in China where coal is the main energy source.
In the past year Bitcoin value went from $200 to $11000, an increase of more than 50 times. If it continues to grow at this rate, we will be looking at energy consumption equivalent to 79,816,400 cars. As a reference point, there are only 30,875,086 registered vehicles in the state of California.
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