Bitcoin mining consumed 154.9 billion kilowatt-hours (kWh) of energy in total around the world last year, or more than 167 countries combined, according to data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) compiled by Anadolu Agency (AA) on Tuesday.
Bitcoin mining is the computational process of solving "cryptographic hash functions," similar to mathematical problems. However, it cannot be done by just any computer but by special rigs used for cryptocurrency mining, commonly housing multiple graphics processor units or even application-specific integration circuits to accelerate the process.
Cryptocurrency transactions are made through the blockchain system, a decentralized, ever-growing ledger where transaction records are kept in encrypted data structures called blocks.
People who go through this process are called "miners" or "cryptocurrency miners."
Miners earn Bitcoin in exchange for the blocks they generate by having their systems solve mathematical problems through the abovementioned process.
Satoshi Nakamoto, the developer of Bitcoin, generated the first block on Jan. 3, 2009, obtaining 50 Bitcoins.
The amount of Bitcoin existing reached 19.6 million, but under the terms, 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 policy hardcoded into the algorithm to cut the generation in half to counteract inflation.
However, in the first Bitcoin halving in 2012, the Bitcoin reward per block dropped to 25 Bitcoin, 12.5 in the second halving in 2016 and 6.25 in the third halving in 2020.
The Bitcoin reward per solved block is expected to drop to 3,125 in the fourth halving, which will occur this year.
The Bitcoin system is expected to go through 28 halving periods until the last block is generated, which will happen by 2140.
Because mining requires many specialized computer systems, it consumes a lot of electricity, estimated at around 1450 kWh, to generate a single Bitcoin.
Factors such as energy consumption in Bitcoin mining, energy costs, and the increasing demand for mining due to increases and decreases in market value. The lesser gains in return for blocks that come with the halving periods make it difficult to predict the amount of energy Bitcoin will consume in the future.
Currently, the U.S., Canada, China, Russia and Kazakhstan are among the countries with the largest shares in Bitcoin mining.
While the U.S. stands out for its easy access to the technical equipment and infrastructure required for mining, Kazakhstan and China are in demand due to 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 whole cryptocurrency market, reaches approximately $921 billion.
It is believed that Bitcoin, which surpassed 167 countries in global electricity consumption, may take 26th place on the list of most electricity-consuming countries.
