Bitcoin energy estimates, which are based on a “profitability threshold” that uses “different types of mining equipment as the starting point”, show that bitcoin energy consumption has declined. On Friday, the Cambridge Bitcoin Electricity Consumption Index reported a 25% decrease since the start of the month.
Currently, the current electricity consumption is sitting at 10.65 gigawatts, and the estimated annualized power consumption now sits at 93.33 terawatt-hours. This is a vast improvement from the 150 terawatt-hours recorded in May.
Bitcoin’s power consumption originates from its proof of work consensus mechanism, which incentivizes Bitcoin “miners” to consume electricity in a race to construct Bitcoin’s next block for a Bitcoin reward. However, when Bitcoin price falls, it becomes less profitable.
Since Bitcoin recently dropped below its all-time high in 2017, miners simply didn’t stay online which inevitably led to reduced power consumption and hash rate.
A recent report from Arcane research also showed that public miners sold off more Bitcoin than they generated in May and June.
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