I’ve read some analysis on Bitcoin profitability and energy consumption that seemed unreliable, so I thought I would put my two cents in on the subject.
For example, many sites are using the Digiconomist’s work on Bitcoin energy consumption. However, I believe this analysis has overstated Bitcoin’s energy consumption by a large degree. According to the Digiconomist, Bitcoin’s annual electric use is approximately 24 TerraWatts per year (TWh/yr):
In a recent article that was forwarded to me by one of my readers, How Many Barrels Of Oil Are Needed To Mine One Bitcoin, the author used the information in the chart above to calculate the energy cost to produce each Bitcoin. He stated that the average energy cost for each Bitcoin equals 20 barrels of oil equivalent. Unfortunately, that data is grossly overstated.
If we look at another website, the author explains in great detail the actual energy cost to produce each Bitcoin. According to Marc Bevand, he calculated on July 28th, that the average electric consumption of Bitcoin was 7.7 TWh/yr, one-third of the Digiconomist’s figure. Here is a chart and table from Marc Bevand’s site showing how he arrived at the figures:
This graph shows the increase in Bitcoin’s hash rate and the efficiency of the Bitcoin Miners at the bottom.