"Bitcoin mining consumed a total of 154.9 billion kilowatt hours (kWh) of energy globally in 2023, or more than 167 countries combined," according to data from the Cambridge Bitcoin Electricity Consumption Index (CBECI). AA reported.
Bitcoin mining is a computational process of solving "cryptographic hash functions" similar to math problems. However, it cannot be performed by a regular computer, but by special platforms used for cryptocurrency mining, which usually house multiple GPUs or even application-specific integrated circuits to speed up the process.
Cryptocurrency transactions are made through the blockchain system - a decentralized, ever-growing ledger in which transaction records are stored in encrypted data structures called blocks.
The people who carry out this process are called "miners" or "cryptocurrency miners".
Miners earn Bitcoin in exchange for the blocks they generate by having their systems solve math problems through the aforementioned process.
Satoshi Nakamoto, the developer of Bitcoin, generated the first block on January 3, 2009, receiving 50 Bitcoins.
The amount of Bitcoin in existence has reached 19.6 million, but according to the conditions, 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 hard-coded policy in the algorithm to cut generation in half to counteracts inflation.
A bitcoin "halving" or halving cuts in half the rate at which new bitcoins are put into circulation.
However, in the first Bitcoin halving in 2012, the reward for one Bitcoin block dropped to 25 Bitcoins, 12.5 in the second halving in 2016, and 6.25 in the third halving in 2020.
The reward for one solved Bitcoin block is expected to drop to 3125 in the fourth halving that will happen this year.
The Bitcoin system is expected to go through 28 halving periods until the last block is generated, which will happen by 2140.
Each Bitcoin requires 1450 kWh of electricity
Since mining requires very specialized computer systems, a lot of electricity is used to generate one Bitcoin, which is estimated to be around 1450 kWh.
Factors such as the energy consumption of Bitcoin mining, energy costs, and the increasing demand for mining due to increases and decreases in market value. The smaller profits in exchange for blocks that come with halving periods make it difficult to predict the amount of energy Bitcoin will consume in the future.
Currently, the US, Canada, China, Russia and Kazakhstan are among the countries with the largest share of Bitcoin mining.
While the US stands out for its easy access to the technical equipment and infrastructure needed for mining, Kazakhstan and China are in demand because of their affordable electricity costs.
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 entire cryptocurrency market, is approximately $921 billion.
It is believed that Bitcoin, which surpassed 167 countries in global electricity consumption, may occupy the 26th place in the list of countries with the largest electricity consumption. /BGNES
