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The market price of one bitcoin can reach as high as $64,000, all of which are dug out bit by bit by Bitcoin miners using chips as "excavators" and electricity as "diesel". Along with the rising price of Bitcoin, the amount of electricity consumed by Bitcoin mining worldwide has also risen. According to research data from the University of Cambridge in the UK, the current annual electricity consumption of Bitcoin mining worldwide has reached 14.3 billion kWh, which is more than the annual electricity consumption of Argentina, the Netherlands and many other countries. If Bitcoin were a country, its electricity consumption would rank among the top 30 in the world. And this number is still growing rapidly. At the beginning of this year, a large-scale, unexpected power outage broke out in Tehran, the capital of Iran. According to foreign media reports, the reason why Tehran fell into darkness was that large-scale crypto mining operations (Bitcoin mining) impacted the power grid load, with local mining consuming up to 45,000 kWh of energy per day. The impact of virtual mining on the real world is beginning to emerge. Why does Bitcoin mining consume so much electricity? The essence of mining is to use chips to answer questions Bitcoin, as well as other blockchain currencies of various names, are distributed through computing power competitions. Mining Bitcoin is equivalent to participating in a math competition, where the host keeps throwing out questions and all contestants participate in the race to answer. Whoever solves the problem first gets the reward, which means mining a certain amount of Bitcoin. This creates an arms race: Bitcoin is becoming more and more valuable, more and more people want to mine Bitcoin, the chips involved in mining Bitcoin are becoming more and more advanced, and the opportunities left for each chip are getting fewer and fewer. When Bitcoin was first created, there was a good chance of mining it using a home computer’s graphics card. But now, without the super computing power of a professional mining farm, you can basically only be a spectator. Each of these professional mines is an electricity-guzzling enterprise. On the one hand, mining chips operate at extremely high frequencies, which consumes a lot of power. This is why mobile phone batteries have higher and higher capacity, but they still need to be charged every day, because newer mobile phone chips also consume more power. On the other hand, the mining machine will generate a lot of heat when it is running at full capacity for 24 hours, which requires the fans of the mining machine and the air conditioners in the mine to run at full capacity to cool down and avoid burning the mining machine. We all have an intuitive concept of how much power the air conditioner consumes. Such high-power-consuming Bitcoin mines are already spread all over the world. In order to save mining costs, miners have turned their attention to places with low electricity costs and low temperatures throughout the year, such as the Arctic Circle. Iceland has been at the forefront of Bitcoin mining since 2017, with numerous mining farms moving their headquarters to Iceland at great expense. The constant low temperature here not only helps the mining machines dissipate heat, but the low electricity bills also help the mining farms save a lot of money. The most crazy place for Bitcoin mining is still in China, especially in the southwest and northwest regions. Currently, more than 70% of the global mining power is in China, distributed in provinces such as Sichuan, Xinjiang, Ningxia, Inner Mongolia, and Guizhou. These regions are "high-quality mining fields" with low electricity costs and low annual average temperatures. As of April 2020, China accounts for more than 75% of global Bitcoin blockchain operations. (Data source: Nature Communications magazine "Policy Assessment of Carbon Emission Flows and Sustainability of Bitcoin Blockchain Operations in China") Some local governments have even taken the initiative to introduce Bitcoin mines and support their development in order to consume local surplus hydroelectric resources. How much electricity will be consumed in the future? Although 14.3 billion kWh is a huge number, it is still within the affordable range for China, a country obsessed with infrastructure construction. But things are obviously not that simple. With the participation of investors such as Tesla boss Musk, the prices of Bitcoin and other cryptocurrencies are constantly hitting new highs amid fluctuations. Higher values can support greater cost investment, and miners are frantically purchasing chips, manufacturing mining machines, and constantly spending money in the mining arms race. The most direct consequence is that civilian chips are becoming more and more expensive, and have become a commodity for investment appreciation. Moore's Law, which has guided the market for decades, states that hardware performance is getting higher and higher, and prices are getting cheaper and cheaper. But now it has been broken by mining. As the number of bitcoins to be mined gradually decreases, the intensity of competition in mining is also increasing exponentially, which will inevitably prompt miners to build more mines and consume more electricity. In the future, can human power generation capacity really support Bitcoin mining? |
