The Bitcoin network could soon be using more electricity than some European countries including Ireland and Austria.
New research published in science journal Joule suggests the network could be using 0.5 per cent of the world’s electric energy to mine bitcoins by the end of 2018
In the study, financial economist and blockchain specialist Alex de Vries calculated that the Bitcoin network currently uses 2.55 gigawatts of electricity, slightly less than the energy consumption of Ireland.
By the end of 2018, de Vries calculates that the number could rise to 7.67 gigawatts, which is almost as much energy as it takes to power Austria.
Alarmingly, if Bitcoin’s value rises as high as some experts predict, the network could eventually consume more than 5 per cent of the world’s electricity.
However, critics of the study have pointed out that the calculations are based on ‘shaky assumptions’ and insufficient evidence.
De Vries, who is the founder of the Digiconomist blog, a senior consultant at the Experience Center of PwC in the Netherlands, is the sole author of the new study.
“The electricity that is expended in the process of mining Bitcoin has become a topic of heavy debate over the past few years,” he wrote.
“It is a process that makes Bitcoin extremely energy-hungry by design, as the currency requires a huge amount of hash calculations for its ultimate goal of processing financial transactions without intermediaries (peer-to-peer).
“We cannot observe this hashrate directly, but it is possible to derive this number from the observable difficulty and the actual time required to mine new blocks for the blockchain.”