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Energy Consumption of Bitcoin Mining

Author

Listed:
  • Küfeoğlu, S.
  • Özkuran, M.

Abstract

After its introduction in 2008, increasing Bitcoin prices and a booming number of other cryptocurrencies lead to a growing discussion of how much energy is consumed during the production of these currencies. Being the most expensive and the most popular cryptocurrency, both the business world and the research community have started to question the energy intensity of bitcoin mining. This paper only focuses on computational power demand during the proof-of-work process rather than estimating the whole energy intensity of mining. We make use of 160 GB of bitcoin blockchain data to estimate the energy consumption and power demand of bitcoin mining. We considered the performance of 269 different hardware models (CPU, GPU, FPGA, and ASIC). For estimations, we defined two metrics, namely; minimum consumption and maximum consumption. The targeted time span for the analysis was from 3 January 2009 to 5 June 2018. We show that the historical peak of power consumption of bitcoin mining took place during the bi-weekly period commencing on 18 December 2017 with a demand of between 1.3 and 14.8 GW. This maximum demand figure was between the installed capacities of Finland (~16 GW) and Denmark (~14 GW). We also show that, during June 2018, energy consumption of bitcoin mining from difficulty recalculation was between 15.47 and 50.24 TWh per year.

Suggested Citation

  • Küfeoğlu, S. & Özkuran, M., 2019. "Energy Consumption of Bitcoin Mining," Cambridge Working Papers in Economics 1948, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1948
    Note: sk959
    as

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    References listed on IDEAS

    as
    1. Max J. Krause & Thabet Tolaymat, 2018. "Quantification of energy and carbon costs for mining cryptocurrencies," Nature Sustainability, Nature, vol. 1(11), pages 711-718, November.
    2. Adam Hayes, 2015. "A Cost of Production Model for Bitcoin," Working Papers 1505, New School for Social Research, Department of Economics.
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    More about this item

    Keywords

    bitcoin; mining; blockchain; energy; consumption;
    All these keywords.

    JEL classification:

    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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