Bitcoin will be consuming half a per cent of the world's electricity by end of year!!!

The amount of energy required by the Bitcoin fad has been forecast to hit half a per cent of the world's entire electricity supply by Christmas 2018.

The network estimated to already be consuming 2.55 gigawatts of electricity is already estimated the network to be consuming. That is more enough to power most of Ireland, the research forecasts that consumption could hit 7.67 gigwatts before the end of year.

The report that was given, written by PwC economist Alex de Vries and published in the journal Joule, represents the first thoroughly reviewed estimate of the electricity used by Bitcoin mining and forecast of where the usage is heading.
Many estimates up to now have been on the basis of the power efficiency of the hardware used, which gives the 2.55 gigawatt figure. However, de Vries argued this does not take into account other factors, such as cooling requirements, which have a cost of their own.

When looking at the forecasting future consumption, that is a whole other problem, and simply using existing approaches offers little insight. de Vries quoted a paper (PDF) which asserted that "miners will produce [hash calculations] until their marginal costs equal their marginal product". Author Adam Hayes disregarded hardware as sunk costs. de Vries disagreed and factored it into his work.

The product magine of mining is the number of Bitcoins found per day on average multiplied by the dollar price of Bitcoin. de Vries cited the example of 16 March 2018, when the marginal product was $15.34m.

Many rational behaviour dictates that mining is undertaken while marginal costs (electricity and hardware) are lower than the marginal product, with the two values moving towards an equilibrium. Calculating when that equilibrium, or ceiling, will be hit is at the heart of de Vries' work.

De Vries told El Reg: "Of course, if the Bitcoin price continues to rise so would this ceiling."

Unfortunately, the Bitcoin craze has, at times, been anything but rational.

By assessing the profitability of Bitcoin mining machine manufacturers such as Bitmain, de Vries was able to put a price on the hardware needed and, along with an assumption that a machine such as the Antminer S9 would last for up to two years, calculate a more accurate estimate of electricity consumption.