The Energy Costs of Crypto Mining in Terrawatt Hours
Despite the current volatility of cryptocurrency, they’re still worth a significant amount of money in the global market. The Washington Post was among the many news outfits that covered how Bitcoin peaked at $17,000 per unit back in December 2017. Bitcoin’s value has since dwindled to $3,847 as of March 2019. And while this is a considerably huge dip, it should be noted that Bitcoin still has an overall current value of $68 billion, followed by Ethereum at $14 billion, EOS at $3.7 billion, and Litecoin at $3.3 billion.
However, just as important as the market worth is what it takes to mine these cryptocurrencies – just how much electricity does cryptomining actually consume? There are many ways to mine Bitcoin, Ethereum, Ripple, EOS, Litecoin, and all the other top cryptocurrencies on the market. But more often than not, if you actually want to earn a considerable profit, you’ll need access to server farms as well as massive amounts of energy to generate even just one coin from the aforementioned cryptocurrencies.
Bitcoin
Because Bitcoin remains at the top of the crypto world, merchants as well as private investors are more than willing to run energy-consuming machines in order to keep mining this pioneering cryptocurrency. These efforts have understandably grown to grand proportions since Bitcoin first came out.
In fact, Digiconomist reveals that the current rate of energy spent on Bitcoin amounts to an annual consumption of 49 Terrawatt hours (Twh).
This means that the total consumption of energy used to mine Bitcoin is now more than what it takes to power small countries like Serbia and Denmark, and almost equal to the energy consumption of Asian economic giant, Singapore. To put 49 Twh in perspective, that’s about 15% of the energy consumption of the whole of Australia, more than 25% of what it takes to power Holland, and just about half of the Czech Republic’s yearly energy needs. Digiconomist also reveals that 49 Twh is enough to power over 4.5 million households in the US.
Ethereum
Given the huge disparity between the market values of Bitcoin and Ethereum, it should come as no surprise that the energy costs of mining Ethereum is less than one-fourth of what it takes to mine Bitcoin. Currently, the annual energy cost of Ethereum mining amounts to a comparatively low 8.9 Twh globally – comparable to the current energy consumption needs of countries like Lithuania and Zambia. This may actually go even lower this year thanks to an internal algorithm change called Casper, a proof-of-stake algorithm aimed at energy efficiency. Casper will be implemented in a gradual manner, depending on Ethereum’s development. And if it ends up significantly lowering the energy costs of crypto mining, other top digital coins may follow suit.
Litecoin
This is a rather tricky one because there’s not a lot of data on the annual energy costs of mining Litecoin. However, what is notable is how this cryptocurrency is quickly increasing in popularity. A long form article about the rise of Litecoin published by FXCM recalls that from March to September 2017 – just before Bitcoin peaked in value – the cryptocurrency went from being worth just $4.30 to $92 per unit. That’s over 2,000% increase in market value. Since then, the relatively new cryptocurrency has decreased in value but also somewhat stabilized. This March, Litecoin’s value was pegged at around $57 per unit.
Although we can’t tell you exactly how much energy it costs the world to mine Litecoin, what we can tell you for sure is that it’s popularity is based on how it’s much faster and lighter to mine than Bitcoin. In fact, current estimates say that mining one Litecoin unit takes less than half the energy needed to mine one Bitcoin. This will be crucial to how the relatively new cryptocurrency climbs the ranks in the near future.
