Bitcoin could use more power than electric vehicles

Jeannie Matthews
January 14, 2018

The 1400 percent rise in bitcoin's price previous year has seen a greater demand for electricity to run mining computers in the country.

As the cryptocurrency-ecosystem is growing in popularity and numbers, more miners are entering the scene and with that more pressure is put on the electrical infrastructure - particularly in Douglas County, small territory in Washington State - [CNBC reporting].

In cryptocurrency mining, miners solve complex mathematical puzzles with computers in order to be awarded the virtual coins.

According to public utility Hydro Québec, the energy surplus of the province is equivalent to up to 100 Terawatt hours over the course of ten years. China is said to be planning to limit power use by miners, which are starting to look elsewhere. That equates to more than half the 38 terawatt-hours of electricity used annually by the world's biggest miner, BHP Billiton Ltd. - or a 10th of the electricity needed to power South Africa.

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Cryptocurrency miners will probably migrate to low-priced power regions, including China and the US, Midwest and Pacific Northwest.

It's hard to predict how much power will be used to mine bitcoin in the future, Lu wrote, as it depends on how efficient the computers running the complex calculations needed for mining become and how many additional computers will be used in the process.

China mines roughly three quarters of the world's bitcoins and authorities such as the People's Bank of China are concerned that mining operators have established their businesses in remote areas rich in coal or hydroelectric power where electricity prices are cheap and they are able to deal directly with power providers rather than via grid operators, thus further impacting capacity. Breakevens are achievable at $3,869 at those power prices, Lu said.

In China, a leaked Jan 2 memo from the "Leading Group of Internet Financial Risks Remediation" - the country's internet finance regulator which initiated the clampdown on bitcoin - said bitcoin miners should make an "orderly exit" from China because they have consumed "huge amounts of resources and stoked speculation of 'virtual currencies", the TechCrunch website reported. The computers used in mining aren't expected to last more than two years and the other equipment involved is relatively cheap.

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