Daily Management Review

Bitcoin craze increased load on the power grid to the maximum


01/11/2018


The jump in the bitcoin rate and the growing popularity of crypto-currency led to a general craze for mining, which began to cause fears due to growing loads on the electricity grid. Some experts predict that at such rates of growth, by 2020, mining will consume the same amount of electricity as it is currently consumed all over the world. However, most analysts agree that grid will be able to withstand the current leap in consumption, and the fashion for mining, including illegal, can soon go down as the bitkoin rate stabilizes and the resources for mining are exhausted for a mass user.



Against the backdrop of the multiple growth of the bitkoin rate in 2017 and the transition of crypto-currency from the financial and technological sphere to the mass culture, increasingly more experts note a sharp increase in energy consumption due to active mining of crypto-currencies. According to calculations of researchers from Digiconomist, only in the last month consumption of electricity by all infrastructure bitcoin has grown by 25%.

The current annual consumption of all bitcoin infrastructure is 35 TWh, which is comparable to the annual energy consumption of a country like Bulgaria, and exceeds energy consumption of a country such as Denmark.

Experts monitoring this process were divided into two groups: some adhere to an alarmist position, believing that the geometric growth of energy consumption in the mining and maintenance of the functionality of the crypto-currency infrastructure will continue. In their opinion, this could threaten the global electrical infrastructure in the near future. Already mentioned Digiconomist and reviewers of Zerohedge portal believe that by 2020, when mining consumes as much electricity as it is now consumed all over the world. Others believe that the dynamics of recent months is temporary. Experts interviewed by The Washington Post believe that by that time the total energy consumption for mining will be only about 1% of the energy consumption in the US or 0.14% of the world consumption level.

While some researchers are trying to predict the consequences of the current mass fashion for mining, others note the countries and areas with the largest concentration of mining farms. A joint study by the University of Cambridge and Visa reported that even with the mass fashion for mining spreading in many countries around the world, three quarters of all mining capacities are now located in only two countries - the US and China. And the clear world leader is China with a share of 58%; the US share 16%. Researchers have calculated that since the start of bitcoin's launch, the miners around the world have managed to "earn" about $ 2 billion in crypto currency. As the mining fever has just started to flare up, China has already launched mining farms - preference was given to remote areas of the country with low tariffs for electricity. For example, a significant amount of electricity consumption in mining is recorded from rural areas of Sichuan Province.

At the same time, researchers note that the opacity of this "industry", and sometimes illegal mining does not allow to accurately determining the amount of energy consumed and, thus, make predictions about the dynamics. The study of the University of Cambridge and Visa says that around the world it was possible to fix sources of electricity for mining with a total capacity of at least 232 MW. At the same time, specialists admit that if we make adjustments to the quality of the Internet infrastructure and power grids and admit that large miners use the latest equipment to "extract" bitcoins, the total capacity of the entire bitcoin infrastructure can be estimated at 462 MW.

 






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