The Great Devourer.
Could Satoshi Nakamoto have conceived – in his wildest of dreams – that a nine-page manifesto, “The Bitcoin” was going to make him (or her – Satoshi’s true identity is yet to be revealed) a multi-billionaire and kick-off an unconscionable energy-swallowing behemoth.
It’s been 10 years this week since Satoshi’s original scribblings and as crypto’s standard bearer, it is not without its controversies: it remains preferred tender for drug dealers, wet workers, and generally all manner of undesirables in the dark web. It’s also at the nexus of significant fraud and theft – over $1bn worth of the crypto nuggets have been liberated from their rightful owners in 2018 alone.
But we are less interested in all that.
More interesting, more concerning, are the insatiable energy needs of Bitcoin. For context, 1 kilowatt-hour (kWh) is the energy used by a 1000-watt appliance running for an hour. In 2013 (when Guy Lane, an Australian environmental scientist noticed that energy required for bitcoin was booming) consumption by Bitcoin miners was increasing by 70,000 kWh every week (the equitant to a medium-size town). Naturally, the greater the value of Bitcoin, the more electricity miners are willing to consume. This year, bitcoin will probably burn through between 55 billion and 75 billion kWh, or about the same amount as the entire country of Switzerland.
This energy devouring is built into Bitcoin’s proof-of-work model – miners race to be the first to solve complex math problems. The victor adds a block to the blockchain and is rewarded with a Bitcoin. Because the system is designed to ensure that this happens only every ten minutes, as the mining tools have gotten faster and more powerful, the complexity of these math problems has increased – this in turn increases the power required to solve them. The rise in value of Bitcoin creates an incentive to make the necessary energy investment.
Today’s miners process 50 quintillion calculations per second, ten times the rate in 2017. The size of that number is breathtaking – and almost impossible to fathom, but consider this: it is larger than the number of seconds that have elapsed since the Big Bang. This incredible computing power is achievable as a result of the increasing density of processors being used. If miners still used the normal CPUs that were commonplace in the early days of bitcoin, their calculations would require the entire electricity output of planet Earth. On the current trajectory, by 2020 mining a single bitcoin will generate 4,000 tons of carbon dioxide.
All this energy, all this computing power, and the computations used for bitcoin mining are in fact meaningless. Of course, they’re required to secure the blockchain, but if you look at it from a distance, the computations are just an extraordinary and unspeakable waste of energy.
