Bitcoin is a digital currency with a robust infrastructure comprising various hardware types, requiring a lot of power to run. Apart from computers, bitcoin usage also involves routers, transformers, cellphone towers, and other electronic devices powered by electricity. Bitcoin mining is one of the critical processes that require a lot of electricity to run the servers. However, that does not mean bitcoin would stop functioning without electricity. The following article explores the amount of energy that bitcoin consumes and what to expect if there is no electricity.
Bitcoin's Electricity Consumption
Among the critical elements for evaluating Bitcoin viability in the absence of power is the amount of electricity it uses. The Cambridge Center for Alternative Finance (CCAF) says bitcoin currently employs about 110 Terawatt Hours annually, equivalent to 0.55% of the world's electricity production. Most of that electricity goes to bitcoin mining and transactions processing. However, the data is still unclear since some mining pools are anonymous, and the bitcoin miners do not fully disclose their operation details.
Hydroelectric power is the primary energy source in most parts of the world today, which also applies to most bitcoin users. Bitcoin mining is the most reliant on electricity as it involves heavy computational power from hardware. Bitcoin's Proof of Work (POW) protocol consumes the most electricity. The Bitcoin Energy Consumption Index shows global bitcoin mining consumes as much energy as the entire Czech Republic for processing about 2.5 transactions per second.
That does not mean that the electricity consumption would significantly increase as per the number of transactions. Besides, the subsidies embedded into the bitcoin mining protocol mean it is doubtful that bitcoin miners will indefinitely expand their operations. However, electricity consumption may increase if bitcoin prices keep growing, attracting more miners looking to boost their earnings.
Things that Could Happen to Bitcoin during Electrical Blackouts
- Slowed bitcoin mining in the affected areas
- Reduction in the number of bitcoin transactions
Addressing the Uncertainties
Since hydroelectricity is the primary power source available in most countries, some parts of the world may have problems, especially with bitcoin mining, if the lights go out. But, that would still have little impact on bitcoin mining as miners can conduct the processes anywhere. Besides, the enormous costs associated with operating bitcoin mining farms have convinced many miners to work in pools, which allow them to share resources, including hardware and energy. That ensures less disruption to bitcoin mining and transactions processing in the event of an indefinite power blackout.
Minimal energy is required to validate transactions since the processes are digitized. Contrary to what some critics say, electricity blackouts would not affect the safety of bitcoin accounts in any way. Bitcoin trading platforms have stringent measures, such as the Bitcoin Prime, which ensure the safety of transactions and user information during trading and indefinite power blackouts.
Many bitcoin miners have begun exploring alternative electricity sources to support their operations without relying on public grids. In China, which accounts for about 80% of bitcoin mining, most miners have tried tapping the surplus energy from the national grids. For instance, the flared natural gas currently used by bitcoin miners in North Dakota has been a viable alternative to electricity generated by fossil fuels.
Solar and wind power are also other energy sources that many bitcoin miners are currently exploring to reduce the heavy reliance on fossil fuel-generated electricity and reduce the industry's carbon footprint. Generally, bitcoin mining is the primary process that would be affected if the lights went out. However, that would have minimal impact on the overall usage of bitcoin.