File Image:REUTERS/Dado Ruvic/File Photo
File Image:REUTERS/Dado Ruvic/File Photo

Mining Bitcoin proving costly

By Bloomberg Time of article published Jan 26, 2018

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JOHANNESBURG - Mining cryptocurrencies is far too energy intensive and is consuming as much electricity as a G20 economy, International Monetary Fund managing director Christine Lagarde said.

“The Bitcoin mining, which is this accelerated and augmented use of computers to actually determine the value and incentive the functioning of the mechanism, is energy angry,” Lagarde said in a TV in- terview with Francine Lacqua and Tom Keene at the World Economic Forum meeting in Davos, Switzerland.

“And we figure that in 2018 if it continues that system will actually consume as much electricity as Argentina.”

Tripled

The electricity needed by the global network of computers running the blockchain technology behind Bitcoin has more than tripled in the last year to more than 37 gigawatt-hours a day, according to Bloomberg New Energy Finance.

That is equivalent to about 30 1.2-gigawatt nuclear reactors running at full capacity.

While higher prices have spurred more mining, it’s impossible to know where the market is headed, according to BNEF analyst Isabelle Edwards. If prices remain high, energy consumption will do the same. But the amount of electricity needed to mine Bitcoins could fall if there are improvements in computing technology.

“In times of climate change and when we look at how much coal is being used in some Chinese provinces to actually mine Bitcoin it’s a big concern,” Lagarde said. 

- BLOOMBERG 

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