Bitcoins Hog Electricity

The amount of computing power needed to sustain the bitcoin virtual currency realm turns out to be an enormous electricity drain.

Each digital coin requires as much as electricity as the typical home uses – in two years, according to a new report in the New York Times.

“The total network of computers plugged into the Bitcoin network consumes as much energy each day as some medium-size countries,” the article said. “And the network supporting Ethereum, the second-most valuable virtual currency, gobbles up another country’s worth of electricity each day.”

The energy requirements of these alternative currency tokens – designed to operate free of bank and government oversight – has startled some backers who do not want to contribute to the climate change problem caused by electricity production.

“I would personally feel very unhappy if my main contribution to the world was adding Cyprus’s worth of electricity consumption to global warming,” said Vitalik Buterin, the creator of Bitcoin.

Like bitcoin itself, the energy conundrum is somewhat mystifying.

Here is how the Times explained the matter:

“All of the computers trying to mine tokens are in a computational race, trying to find a particular, somewhat random answer to a math algorithm. The algorithm is so complicated that the only way to find the desired answer is to make lots of different guesses. The more guesses a computer makes, the better its chances of winning. But each time the computers try new guesses, they use computational power and electricity.”

Bottom line, by one account it takes 80,000 time more electricity to facilitate each bitcoin transaction as it does to process a credit card purchase.