Ethereum And Bitcoin Energy Consumption Surpasses Entire Countries' Power Budgets
In addition to the hardware that you’ll need to purchase (or repurpose) for mining, there’s also energy consumption to keep in mind. Even though mining GPUs like the ASUS MINING P106 and Biostar Radeon RX 470D have been designed and optimized for efficiency, electrical consumption is still a big cost that must be factored into any calculations on profitability. And considering that the price of an Ethereum token has surged from $10 at the beginning of 2017 to as high as $300, an influx of amateur miners has entered the fray. That means more mining rigs and even higher energy consumption.
Power use is up so dramatically, in fact, that Ethereum (and Bitcoin) mining is consuming the same amount of electricity as a small country.
According to the latest Bitcoin Energy Consumption Index, Bitcoin mining is pegged at an estimated annual electricity consumption value of 14.54 terawatt hours (TWh). Breaking the numbers down further, the average Bitcoin transaction requires 163 kilowatt hours (KWh) of electricity, which is enough to power the average U.S. household for about five and a half days. That would put Bitcoin on par with Turkmenistanm, which ranks 81st when it comes to the energy consumption rankings of countries around the globe.
For comparison, Ethereum mining has annualized average electric consumption that is roughly a third of Bitcoin, or 4.69 TWh. The average Ethereum transaction requires 49 KWh, which is enough to power a U.S. household for about a day and a half. When compared to global energy consumption, Ethereum most closely aligns with Moldova, which ranks 120th globally.
Despite its lower power requirements, annualized global revenue for Bitcoin comes in at roughly $2.4 billion compared to around $2 billion for Bitcoin. It’s no wonder that Ethereum is on track to overtake Bitcoin in market cap, in what is being billed as “The Flippening”.
It should be noted, however, that the power requirements for Ethereum mining could go down in the future, as the network’s developers are working on transition from a proof-of-work algorithm to a hybrid proof-of-stake model.