Bitcoin Electrical Consumption

Methodologies & Misconceptions

Due to the vast, globally distributed topology of the Bitcoin network, the amount of electrical power and energy that miners consume isn’t exactly verifiable, instead it must be estimated. Among the energy consumption hysteria [(1) (2) (3)] over the previous few years, a surprisingly large number of reputable sources have weighed in and attempted to estimate Bitcoin’s network energy consumption in more level-headed and data-derived ways:

Some small bitcoin miners draw about 1,300 watts of electrical power and use about 31,200 watt-hours of energy over a 24-hour period

Economics-Based Estimations

Economics-based approaches that estimate Bitcoin network energy consumption generally assume perfectly rational market behavior, and can easily be manipulated with a few input variable misassumptions.

  • [MR] = [MC]
  • [(blocks/day)*(reward/block)*(BTC Price) ]=[(kWh/ day)*($/kWh)]
  • [(blocks/day)*(BTC/block)*($/BTC)]/($/kWh) = (kWh/ day)
Average U.S. electrical costs in cents per kWh by state, per EIA data
  • [(144)*(6.25/block) * $10,750] / ($0.10/kWh) = (96.75 GWh/ day)
  • Bitcoin mining, network hash rate and therefore network energy consumption isn’t as responsive to sudden price movements as these economics based estimation methods are.
  • The economics-based model claims energy usage is cut in half along with network miner rewards after each bitcoin block reward halving cycle, which is every 210,000 blocks or about 4 years, while difficulty and proof of work based data disproves this.
  • This type of model assumes a single average global energy cost ($/kWh); electrical energy costs vary widely by region, seasonally, and even by energy source.
  • Likely to be an upper-bound estimation
  • Bitcoin Difficulty (Unitless)→ Bitcoin Hash Rate (Daily Average TH/s)
  • Daily Average Hash Rate (TH/s) → Yearly Hashes (TH/Year)
  • Yearly Hashes (TH/Year)* Yearly Hash Heat Rate (Joules/TH) = (J /Year)
  • Energy/Year (J/Yr) → (kWh/Yr) → (TWh/Yr) → (ktoe/Yr)
Bitcoin network hash rate (Th/s) compared to difficulty, April 2015 to April 2020.
Estimated total Bitcoin network terahashes by year
Scientific International (SI) unit prefixes, based on NIST data here.
Bitcoin network hash rate colored by general device type eras, in terahashes per second.
Manufacturer published SHA-256 ASIC energy per hash heat rate in Joules/Terahash by bitcoin mining rig
Bitcoin mining equipment average yearly heat rate (energy per work), the inverse of efficiency (J/Th)
  • Yearly Hashes (TH/Year)* Yearly Heat Rate (Joules/TH) = (J /Yr)
  • Energy per Year (J/Yr) → (kWh/Yr) → (TWh/Yr)
Yearly Estimates For bitcoin network energy consumption, in kWh
  • The quantity of active miners by level of efficiency isn’t known, and this physics-based model assumes equal participation from all miner models available on the market by year released.
  • This physics-based model used stair stepped yearly heat rate data as in input. That yearly data abruptly changes at the 1st of each year, a gradual heat rate decline is more realistic as older miners steadily retire and new ones fire up.
  • It assumes old miners retire after a year of usage, which is also unlikely as equipment life cycles are now ranging 2 or more years.
  • Likely to be a lower-bound type of estimation.
Bitcoin network hash rate (EH/s) and yearly electrical energy (TWh/year) estimates from various sources
A comparison of various bitcoin network yearly energy estimations shown in units of TWh/Year. Composite Bitcoin Energy Index CBEI, [Physics, Economics, University of Cambridge (C-BECI) & Alex de Vries (D-BECI)]
Composite Bitcoin Energy Index (CBEI) yearly energy estimation (TWh/s) compared to network hash rate (EH/s) December 2017–October 2020
A bitcoin network electrical power draw estimation, the Composite Bitcoin Power Index (CBPI) expressed in Gigawatts, GW, or 1 Billion Watts
  • 650 TWh/Year on the banking system
  • 200 TWh/Year on gold mining
  • 75 TWh/Year on PC & console gaming
  • 60 TWh/Year on bitcoin mining (CBEI)
  • 11 TWh/Year on paper currency and coin minting
  • 7 TWh/Year on Christmas lights in the US
A comparison of our Composite CBEI Index to other common energy usage yearly estimates

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Blockbain

Blockbain

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Blockbain is a licensed professional engineer and a certified bitcoin professional who specializes on the electrical power gird and bitcoin mining mechanics.