Bitcoins were in limelight for so many years but in the last few months, their worth increased rapidly all around the world. Until last year, a Bitcoin was worth less than $1000 per coin but then its value climbed to $5000 by mid-October and now it’s hovering over $14,000 per coin. Not only the price of Bitcoin is reaching new heights but its energy cost is also increasing rapidly.
Every single transaction of Bitcoin requires an immense amount of computing power to pull off and those calculation are not free of course. According to an analysis by Digiconomist, the amount of electricity consumed to run Bitcoin mining operations is only slightly less than the amount of electricity required to power the country of Denmark.
Bitcoins will become harder to mine because of its design the amount of electricity used will increase further. If the trend continues to increase like past, by 2019 Bitcoin will require energy that can run the entire USA. This might not happen if the price of Bitcoins drops. However, the currently huge amount of energy has to come from somewhere. Chances are that Bitcoin mining rigs will be powered by burning fossil fuels and generating electricity.
Countries could choose to build renewable energy generators instead of fossil fuel plants and there is a chance that future energy technology may allow Bitcoin transactions to be completed with much less energy. It is also possible that some countries may increase their power generation with new natural gas plants and Bitcoins remain as energy-intensive as ever.
Even though there is a strong commitment to renewable energy, energy grids still require baseline power that is provided by fossil fuels. A large power requirement always means more fossil fuel no matter how many wind farms or solar panels a country wants to build. In a few years, Bitcoins and other cryptocurrencies may be the source of a significant percentage of world’s energy needs.
How much carbon dioxide be will released into the atmosphere because of Bitcoins? The exact answer is still unknown but it will certainly be a lot. The question is, whether or not this decentralized currency will be worth so much energy cost or not.