Fuat Kabakci
16 January 2024•Update: 17 January 2024
ANKARA
Bitcoin mining around the globe last year consumed 154.9 billion kilowatt-hours (kWh) in total, or more than 167 countries combined, according to data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) compiled by Anadolu.
Bitcoin mining refers to the computational process of solving as "cryptographic hash functions," similar to mathematical problems. However, it cannot be done by just any computer but by special rigs used for cryptocurrency mining, commonly housing multiple graphics processor units or even application-specific integration circuits to accelerate the process.
Cryptocurrency transactions are made through the blockchain system, a decentralized, ever-growing ledger where transaction records are kept in encrypted data structures called blocks.
People who go through this process are called "miners" or "cryptocurrency miners."
Miners earn Bitcoin in exchange for the blocks they generate by having their systems solve mathematical problems through the aforementioned process.
Satoshi Nakamoto, the developer of Bitcoin, generated the first block on Jan. 3, 2009, obtaining 50 Bitcoins.
The amount of Bitcoin in existence reached 19.6 million, but under the terms, only a maximum of 21 million can be generated.
Bitcoin requires miners to solve equations that take about 10 minutes to generate blocks, and 210,000 blocks are allowed to be generated each halving, which is a policy hardcoded into the algorithm to cut the generation in half to counteract inflation.
However, in the first Bitcoin halving 2012, the Bitcoin reward per block dropped to 25 Bitcoin, 12.5 in the second halving in 2016, and 6.25 in the third halving in 2020.
The Bitcoin reward per solved block is expected to drop to 3,125 in the fourth halving, which is expected to occur this year.
The Bitcoin system is expected to go through 28 halving periods until the last block is generated, which is to happen by 2140.
Each Bitcoin takes 1450 kWh of electricity
Because mining requires a large number of specialized computer systems, it consumes a lot of electricity, which is estimated to be around 1450 kWh to generate a single Bitcoin.
Factors such as energy consumption in Bitcoin mining, energy costs, the increasing demand for mining due to increases and decreases in market value, and the lesser gains in return for blocks that come with the halving periods make it difficult to predict the amount of energy Bitcoin will consume in the future.
As of now, the US, Canada, China, Russia, and Kazakhstan are among the countries with the largest shares in Bitcoin mining.
While the US stands out for its easy access to the technical equipment and infrastructure required for mining, Kazakhstan and China are in demand due to their affordable electricity costs.
Total value of cryptocurrencies currently caps at $1.89T
The global cryptocurrency market is valued at $1.89 trillion, with 12,033 currencies traded on 965 exchanges worldwide.
The value of Bitcoin, which makes up 49% of the whole cryptocurrency market, reaches approximately $921 billion.
It is believed that Bitcoin, which surpassed 167 countries in global electricity consumption, may take 26th place on the list of most electricity-consuming countries.
