Bitcoin Mining's Electricity Bill: Is It Worth It?

They say it takes money to make money; in order to make a profit off Bitcoin mining, you have to buy mining equipment and pay your electricity bill first.

As more miners join the Bitcoin network, some individuals fear that the amount of electricity consumed by mining will have a negative impact on the environment.

As the Bitcoin network attracts more miners, the mining difficulty increases, and usually, the amount of energy a mining rig consumes increases too.

In a recent research study published in Joule, De Vries found that the average amount of electricity consumed per Bitcoin transaction is 300 kwH, and at the rate new miners are joining the network - and the mining difficulty increases - this number has the potential to reach 900 KwH by the end of 2018.

As mining equipment becomes better at solving blocks, the electricity consumed by each mining rig increases.

Although the amount of energy mining operations consume does not go unnoticed, some individuals believe that the benefits of mining - network security - outweigh the negative externalities like electricity consumption.

The total amount of Bitcoin that can ever exist is 21 mln, and as mining rigs consume more energy, miners incur higher electricity bills, and the reward for mining Bitcoin diminishes.

Individuals like Bevand and businesses like Morgan Stanley say there's no need to worry, because Bitcoin mining consumes such a small fraction of the world's total electricity consumption.

Although we may not be able to see the toll that Bitcoin mining is taking on our environment with the naked eye, there is no doubt that the Bitcoin network will have to reduce its energy consumption before the Bitcoin blockchain undergoes mass adoption.

If the amount of electricity consumed by mining is not kept under control or made more efficient, then it is possible that the impact to the environment will be irreversible once people become aware of the negative effects that Bitcoin mining had on it.