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.
If you see something out of place or would like to contribute to this story, check out our Ethics and Policy section.
