Bitcoin Is a Significant Component of ICT Electricity Consumption

We've tracked the growing environmental impact of virtual currency Bitcoin since 2013. A new analysis shows that its electricity footprint now rivals that of Nigeria.

Digiconomist has posted an analysis of Bitcoin electricity consumption. It estimates annual Bitcoin energy consumption from mining and transactions to be 24 TWh, enough to power over 2,200K US households. (By contrast, the electricity required for a year's worth of VISA transactions is about that of 50K US households.) This is ~2% of total ICT electricity consumption. At an estimated daily growth of 65 GWh, Bitcoin has become a major driver of ICT energy consumption.

Digiconomist suggests an option for more sustainable virtual currencies. "Proof-of-work was the first consensus algorithm that managed to prove itself, but it isn’t the only consensus algorithm. More energy efficient algorithms, like proof-of-stake, have been in development over recent years. In proof-of-stake coin owners create blocks rather than miners, thus not requiring power hungry machines that produce as many hashes per second as possible. Because of this, the energy consumption of proof-of-stake is negligible compared to proof-of-work. Bitcoin could potentially switch to such an consensus algorithm, which would significantly improve sustainability. The only downside is that there are many different versions of proof-of-stake, and none of these have fully proven themselves yet. Nevertheless the work on these algorithms offers good hope for the future."

2013

The New York Times profiled in December 2013 a large Bitcoin mining company called Cloud Hashing. The article notes, "The computers that do the work eat up so much energy that electricity costs can be the deciding factor in profitability."

The New York Times cites research giving the scope of Bitcoin mining's energy needs. "Today, all of the machines dedicated to mining Bitcoin have a computing power about 4,500 times the capacity of the United States government’s mightiest supercomputer, the IBM Sequoia, according to calculations done by Michael B. Taylor, a professor at the University of California, San Diego. The computing capacity of the Bitcoin network has grown by around 30,000 percent since the beginning of the year." A purpose-built Bitcoin mining machine from CoinTerra, for example, consumes ~1.7kW and requires liquid cooling. It is not surprising that the company promotes that its "...team brings tremendous experience in power efficient circuitry...to the exciting new frontier of ASIC Bitcoin mining hardware."

Cloud Hashing's solution does not surprise me. The company located its computers in "...Iceland, where geothermal and hydroelectric energy are plentiful and cheap. And the arctic air is free and piped in to cool the machines, which often overheat when they are pushed to the outer limits of their computing capacity." We have written extensively about companies using Iceland for green data centers. Iceland's renewable energy is low carbon and ICT energy consumption can be reduced through free air cooling. Cloud Hashtag sites is operations in the Icelandic facility of Verne Global.

There is an twist to the Green ICT angle. "Cloud Hashing is now preparing to open a mining facility in a data center near Dallas...The higher energy costs — and required air-conditioning — in Texas are worth it for [founder] Abiodun. He wants his operation to be widely distributed in case of power shortages or regulatory issues in one location." Dallas is a questionable location from a Green ICT perspective, because there are a number of United States locations whose advantages are more like Iceland than Dallas. Wyoming is one example.

Follow-up: After I opined that the New York Times article might raise Green ICT awareness, the paper featured four comments on the original article on page 5 of the 29 December Business section. One went straight to the point, "...that much computing power has only a very real effect: to waste energy and release greenhouse gases galore as these computers churn away."