Mon Sep 20

Bitcoin Mining - An insight into generation power & cost

Introduction

In 21st century Bitcoin appears to be a beneficial way for the transaction of money between sender and receiver, but in reality creating a bitcoin is not free of cost. The computer- based producers of this cryptocurrency need to have access of mammoth quantities of electricity in the process of manufacturing of bitcoin. Due to this heavy reliance on electricity has its own set of cons. Researchers and experts in this field argue about the effects of bitcoin generation on the environment.

Total Electrical Consumption

One might think that how much electric power is required to manufacture a bitcoin? And it’s a valid question too. A research conducted by the U. S Senate Committee on Energy and Natural Resources in the year 2018 shows that bitcoin manufacturing consumes 1 % of the total consumption by entire world.

Bitcoin creation is done by Quantum AI app from all over the world. These people are computer-based miners who are trying to crack the mathematical puzzles using their systems. In every 10 minutes someone cracks the puzzle and gets a reward in the form of few bitcoins. Creation of the bitcoin is a never ending loop, so the electricity consumption also increases with every passing day.

Bitcoin becoming a trend

Bitcoin is still a learning curve for the public all over the world. In the time to come as more and more population starts to learn the art of mining the bitcoin by solving mathematical puzzles by using powerful computers, the value of bitcoin will increase rapidly and so is consumption of electric power. One might wonder that as more people join the network, puzzles will be solved in less time and more easily.

But that is not the case, the software which is designed to generate the bitcoins is made in such a way that no matter how powerful your computer is or how genius you are, it will always take you 10 minutes to crack the puzzle. The algorithm in the software will change the puzzle difficulty depending on the number of miners trying to crack the puzzle.

Estimating the Electricity Cost

Estimating the electrical energy used in the generation of the bitcoin is easier said than done. For this, you will need to understand the method through which the bitcoin creation is done. It is about cracking puzzles which are mathematical in nature and get harder with the increase in the number of people.

In terms of electrical consumption, we need to calculate the number of sums done per second to crack the mathematical puzzle and after calculating that we only have to drive the quantity of electrical energy consumed for solving each sum. The sums which are contacted in this process are called hashes. These hashes are present in huge number, so to make it simple you have to use mega hashes for millions and giga hashes for a billion so you don’t get confused.

There are a lot of different computer systems for mining bitcoin in the market. Computing companies which manufacture these computers use Application- Specific Integrated Circuit (ASIC) computer systems because, (ASIC) mining computer systems takes less electrical energy to calculate the sum for solving the puzzle. Bossiness which generate the bitcoins say that it requires one watt of electric power consumption for giga hash per second for mining the bitcoins.

If this claim is correct then bitcoin network requires 120 gigawatts per second. It means on yearly basis 63 terawatts- hours (TWh) is consumed.

Mining Costs Tend To Vary Per Regions

Bitcoin generation cost also heavily depends on the country or area you are living in and what is the electricity cost there? You also need to estimate the quantity of power you will use for the mining. For the purpose of saving electricity cost if the electricity expensive in your region, you need to have efficient gear for mining because it will decrease the power consumption. Lower the cost of mining more the value of bitcoin will increase.

Exchange of bitcoin have seen its fair share of fluctuation in the past, but until or unless its remains more than the cost of production, mining in the region where electricity is cheap will be profitable.

Is bitcoin mining really worth it?

Is mining bitcoin worth it? What is the real cost we have to pay in order to mine the bitcoins? What will be the environmental cost? These questions have only one answer which is the more people become the part of the network, the more electricity will be required and more environment will be effected.