Bitcoin mining is on the rise, though the demand for the cryptocurrency has decreased following the sharp reduction in Bitcoin prices over the last couple of months. According to reports Bitcoin network now consumes as much electricity as the whole country of Ireland. Bitcoin is currently trading at $ 8501.11, in India the value is at Rs 5,78,180.
Bitcoins work on the decentralized ledger, which runs on computers across the globe. Unlike your bank where all transactions are centralized, Bitcoin transactions are validated by the group of miners and for validating and updating the transaction they are rewarded with a new Bitcoin.
According to a report by Alex de Vries, the Dutch researcher, the Bitcoin network uses as much electricity as Ireland. As reported, according to his estimates, “Bitcoin miners use at least 2.55 gigawatts of electricity currently, and potentially 7.67 gigawatts in the future.” De Vries considers that electricity makes up 60 percent of the total cost of mining Bitcoin. He also states in his paper that the average cost of electricity around the world is 5 cents per KWh.
Many people have, however, started raising questions on the way electricity consumption has been calculated. The fact that not much data is available on the subject negates the study. Moreover, miners which are the only source of information are spread across the globe and are not so willing to share information on them.
As the number of miners increase, the reward decreases whereas time-taken to process the cryptocurrency increases. According to estimates, it is currently 12.5 Bitcoin per 10 minutes. The number has slowed down considering it was 50 Bitcoins every 10 minutes around 2010. The data suggest that mining requires more energy to run faster processors.
Meanwhile, there have been reports that other cryptocurrencies, such as, Ethereum, is working on the technology that might need much less energy than Bitcoin and could, therefore, dethrone the largest currency by market share in the long run. Bitcoin currently has more than 50 percent of the market share