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Research has shown that Bitcoin’s high power consumption claims are grossly exaggerated.

Bitcoin has many active and influential critics. At first, Bitcoin was a scam; now BTC is one of the national currencies of El Salvador. This then “facilitated illegal activities”, though cash is still a criminal’s best friend. Now activists say it’s an environmental disaster, another weak argument put forward by a small but vocal minority.

At the same time, according to a recent report published by Arcane Research, while the energy consumption of BTC mining has grown significantly in recent years, the industry still makes up a very small part of the total global volume.

Bitcoin miners currently use about 100 TWh of electricity per year. This figure accounts for about 0.06% of total global energy demand, which is very small.

The extraction of physical gold and, especially, the production of paper, requires much more energy.

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Arcane Research researcher Jaran Mellerud has modeled bitcoin’s energy consumption through 2040 at various asset prices. He listed the most significant components of his model:

    • bitcoin price;
    • transaction fees;
    • the percentage of income that is directed to cover the cost of electricity;
    • average price of electricity.

Mellerud derived the following formula:

Annual consumption of the bitcoin network = Bitcoin price * (block rewards + average transaction fee per block) * number of blocks mined per year * percentage of revenue spent on electricity / average price of electricity in the mining industry

According to him, the market value of a cryptocurrency is the most important factor in determining the consumption of its network in the future.

“The price of Bitcoin multiplied by the block reward determines the industry-wide income of miners. It covers costs and generates profits. An increase in the price of a cryptocurrency increases the income of miners across the industry and their profits in the short term, ”the researcher noted.


Bitcoin miners mine 52,560 blocks per year. At the same time, according to Coin Metrics, historically, the average amount of transaction fees per block is 0.4 BTC.

The model assumes maintaining the indicator at 0.4 BTC until 2040. According to the researcher’s calculations, the share of commissions in miners’ income will reach 67% by this time. Halvings occurring every four years (the process of reducing the speed of generating new units of cryptocurrency) will reduce the block reward to 0.195 BTC by 2040.

Research has shown that Bitcoin's high power consumption claims are grossly exaggerated.

On the other hand, historically, along with the price, energy consumption has always increased. Therefore, Bitcoin’s rally over the next couple of decades could really make the network a “global consumer.”

The researcher also modeled three scenarios:

    • bullish: the price of the cryptocurrency grows linearly to $2 million by 2040;

    • neutral: Bitcoin reaches $500,000 by 2040;

    • bearish: $100,000 by 2040.

Studies have shown that claims of Bitcoin's high power consumption are greatly exaggerated.

Even if it reaches $2 million by 2040, Mellerud calculates that the Bitcoin network will consume 894 TWh annually, about 10 times more than its current level.

“This is 0.36% of the estimated global energy consumption in 2040, which implies a significant increase from the current figure of 0.05%,” Mellerud said.


The neutral scenario assumes an annual energy consumption of 223 TWh, just over double the current meager level.


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