During the great graphics card shortage of 2017 (and part of 2018), the finger often got pointed at cryptocurrency mining and the effect it was having on availability and prices. To be fair, memory production played a role too, though even Nvidia admits that it made hundreds of millions of dollars from crypto-sales. Will that ever happen again?
We can't say for sure, though there are some factors working against continued a second massive mining boom. One is the decreased profitability as of late. The other is power consumption, and if recent studies are accurate, that could ultimately be what slows things down.
Eric Holthaus at Grist wrote about Bitcoin's energy use last year. In the six months since then, he says Bitcoin's energy footprint has more than doubled. He also points to a newly published peer-reviewed study that predicts it will double yet again by the end of the year.
The first peer-reviewed study of bitcoin’s energy consumption confirms our fears:Bitcoin’s energy consumption is growing at 20% *per month* and is effectively erasing decades of progress on renewable energy.https://t.co/JnYEq3uExiMay 17, 2018
One thing to note is that the author of the study, Alex de Vries, is an economist and data consultant who shared his findings before. However, this is the first time that Bitcoin's energy use has found its way into a peer-reviewed journal.
Part of the challenge in analyzing it all is that Bitcoin's value fluctuates, sometimes wildly. There's also the increase in computer efficiency. These factors combined have slowed Bitcoin's energy consumption growth rate to 20 percent per month so far this year. That's still a big number, though.
Barring a change, by Holthaus' calculations, Bitcoin is on a path to consume the entire world's electricity by January 2021. Obviously that won't happen, as all exponential growth curves eventually fail for one reason or another. It's not hard to imagine the various government of the world stepping in with regulations to curb energy use.
Whether that's where things are headed remains to be seen. Joe Romm at ThinkProgress published a counterpoint saying "the only thing more over-hyped than Bitcoin is the question about the fraction of the world energy now consumed." Specifically, Romm points out that a nation's total energy consumption doesn't just include electricity, but also oil used for transportation and fuels for heating, like natural gas, coal, and wood.
He claims there are other flaws in the study as well. Time will tell if he's ultimately right, or if this something we should be concerned about.
Even without government intervention, simple math says Bitcoin's power use can't continue growing forever. By 2020, estimated world energy production per year will be around 175,000 TWh, and at $0.10 per kWh that would work out to $17.5 trillion per year. In 2020, the block reward of Bitcoin will drop to 6.25 BTC, or around 328,500 BTC per year. At that point, for mining to just break even, Bitcoin would have to be worth over $50 million per coin.
And if you think Bitcoin is ever hitting that mark, we've got a plane full of of GTX 1180 cards we're willing to sell at a bargain.
