The generation of cryptocurrencies takes place through computing power and ensures high power consumption in Bitcoin mining.
This is why Bitcoin mining consumes an immense amount of electricity
The so-called Bitcoin miners are an important component for the network. Mathematical complications are solved for the transfer of the cryptocurrency. This process requires quite a lot of energy. The miners provide the computing power and thereby “mine” the Bitcoins.
- Mining: This term means “mining” in German and is a reference to gold mining. The transaction of the cryptocurrency creates new coins (or the fraction of a coin). These go to the miners, as they provide the computing and energy power to the network.
- Proof of work algorithm: This is what the algorithm for transferring bitcoins is called. The more Bitcoins are generated, the more difficult the mathematical problems become and the required computing power increases. This, in turn, results in an ever-increasing energy requirement.
- Power consumption: It is extremely difficult to determine the exact amount of power required. This is because the values change depending on how many transfers run through the network. The number of miners also plays a role. According to cryptomonday.de, mining a single Bitcoin consumes as much electricity as an average household in nine years.
- Annual energy demand:According to Statista, the annual electricity demand for mining Bitcoin is 125 terawatt hours. This exceeds Ukraine’s annual electricity consumption (124.5 terawatt hours). However, experts keep stressing that these are estimated values.