With the passage of time, the frequency of bitcoin mining activity is escalating. This escalation is encountered by the recent downfall of bitcoin value, as reported by BCFocus. Surprisingly, the amount of energy consumed by the European nation, Ireland is equivalent to bitcoin mining.
Ireland happens to be 118th nation in terms of landmass and consumes electricity of 2.55 gigawatt. This estimation is the current energy consumption of bitcoin mining. It is almost half a percent of the total electricity consumed by the all the nations in the world. The trading value of bitcoin in the current crypto market is $8501.11.
This estimation of energy consumption in the mining process is affirmed by a Dutch researcher, Alex de Vries. A recent study of Vries suggests, “Bitcoin miners use at least 2.55 gigawatts of electricity currently, and potentially 7.67 gigawatts in the future.”
According to his analysis published on 16th May,2018, the costs involved in the mining activity of bitcoins bear 60 percent in electricity consumption. In the report, Vries mentions about the average cost of global electricity consumption is 5 cents/KWh.
In general, people are sceptical about the manner in which electricity is consumed in bitcoin mining. Also, the global deployment of the miners lays impact on the information availability.
These miners are also unwilling to share information about themselves. Consequently, the data available to comprehend the manner of consumption is in dearth.
Increase in the count of miners is directly proportional to the time consumed to generate the virtual currencies. However, this increase in miners is equated with the decrease in reward.
The estimates suggest that currently, in every 10 minutes 12.5 Bitcoins are generated. There has, indeed, been a deterioration in the mining activity since 2010. In 2010, a total number of 50 Bitcoins were generated. This data explicitly suggested the requirement of more energy to increase the processing speed.
Bitcoin is all set to receive tough competition from the emerging cryptocurrencies in the market of digital currency. Virtual currencies, namely, Ethereum has begun preparing a technology that would reduce the rate of energy consumption.
The current share of bitcoin in the crypto market has exceeded 50 percent. Decentralised ledger is used to facilitate these digital currencies in the virtual currency based market. Globally, bitcoins are used for payment transaction through computational system.
The centralised operational mode in banks pertaining to transactions are not involved in bitcoin transactions. Validation of the payment transaction is given by the miners, themselves. Once the validation and update of the transaction is completed, these miners receive newly mined bitcoins as reward.
Vries has, finally, concluded the report stating that it is essential to comprehend the estimation of the electricity consumed in mining. This would assist in the determination of sustainability of the virtual currencies in the market space.
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