Bitcoin Sustainability Report August 2017

Digiconomist is committed to promoting (the development of) sustainable blockchain technology. Blockchain protocols such as Bitcoin currently run on the energy-slurping proof-of-work algorithm (creating these proofs of work is better known as “mining”). The Bitcoin Energy Consumption index is a key tool that was created to provide insight into this energy consumption amount, and raise awareness on the unsustainability of the proof-of-work algorithm. The sustainability report uses historical data from the Bitcoin Energy Consumption Index to summarize the sustainability progress and performance of the Bitcoin protocol over the past month.

August Highlights

August was the month of the Bitcoin Cash fork. On the first day of the month Bitcoin split in two currencies, which turned out to be worth more than a single Bitcoin (and subsequently rallied over 50% to a record high). The new currency also turned out to have an exploitable difficulty algorithm, making this August the best month ever for Bitcoin miners. In terms of sustainability it’s most likely the opposite. The highlights of the past month are as follows:

  • Mining revenues increased by almost 60%.
  • Mining revenue from transaction fees increased by more than 100%.
  • The average fee per single transaction was $4.36 (up by more than 90%).
  • The total network power consumption increased by almost 9%.
  • The average energy consumption per transaction was up by less than two percent, but still amounts to 174 KWh per unique transaction (enough to power 1 U.S. household for almost 6 days).
  • The number of blocks mined decreased by 10%. The Bitcoin Energy Consumption Index doesn’t include Bitcoin Cash (yet), and due to the exploitable difficulty algorithm of the latter it managed to win over a relatively big part of Bitcoin’s total hashrate. This also distorts the average network efficiency.

The full report is featured below:

Description Value Monthly change Trend
Mining Revenue
Total Blocks Mined 4,398 -10.13%
Average Bitcoin Price $3,864 54.37%
Average Price Volatility 79.01% 12.53%
Mining Revenue from Fees $33,654,493 104.70%
Mining Revenue from Blocks Mined $228,158,284 54.37%
Total Mining Revenue $261,812,777 59.41%
Mining Costs
Total Costs of Mining $67,192,948 8.94%
Percentage of Total Revenue 25.66% -31.66%
Total KWh Consumed 1,343,858,967 8.94%
Network Power Consumption (GW) 1.81 8.94%
Network Statistics
Total Transactions Processed 7,725,443 6.88%
Average KWh Consumed per TX 174 1.75%
Average Fee per Transaction $4.36 92.07%
Energy cost per TX (at 5 cents per KWh) $8.70 1.75%
Average Network Hashrate (GH/s) 6,307,857,865 5.74%
Average Network Effciency (J/GH) 0.29 3.06%
Bounds
Economic Maximum KWh Consumed 5,236,255,541 59.41%
Technical Minimum KWh Consumed 469,224,500 5.71%
Maximum Power Consumption (GW) 7.04 59.28%
Minimum Power Consumption (GW) 0.63 5.00%
Maximum KWh Consumed per TX 677.79 49.15%
Minimum KWh Consumed per TX 60.74 -1.09%

Year to Date Performance

Apart from the changes in monthly performance, numbers on the current year to date (YTD) performance are found in the following table. These numbers confirm August was a good month for Bitcoin miners, as almost 30% of the YTD mining revenue was mined was the past month. Another observation is that Bitcoin has so far consumed as much energy as Latvia consumes over a full year, with four more months to go until the end of the year.

It should be noted that the Bitcoin Energy Consumption Index wasn’t officially launched until February 10, 2017. For this reason, the year to date performance is measured as of this date.

Description Value Aug vs. YTD
Mining Revenue
Total Blocks Mined 30,391 14.47%
Average Bitcoin Price $2,106 183.48%
Average Price Volatility 61.10% 129.31%
Mining Revenue from Fees $124,721,682 26.98%
Mining Revenue from Blocks Mined $797,480,592 28.61%
Total Mining Revenue $922,202,274 28.39%
Mining Costs
Total Costs of Mining $354,900,342 18.93%
Percentage of Total Revenue 38.48% 66.69%
Total KWh Consumed 7,098,006,836 18.93%
Network Power Consumption (GW) 1.46 123.37%
Network Statistics
Total Transactions Processed 55,631,575 13.89%
Average KWh Consumed per TX 128 135.94%
Average Fee per Transaction $2.24 194.64%
Energy cost per TX (at 5 cents per KWh) $6.40 135.94%
Average Network Hashrate (GH/s) 4,669,015,906 135.10%
Average Network Effciency (J/GH) 0.31 91.33%
Bounds
Economic Maximum KWh Consumed 18,444,045,487 28.39%
Technical Minimum KWh Consumed 2,263,395,037 20.73%

For a daily estimate of Bitcoin’s energy consumption make sure to visit the Bitcoin Energy Consumption Index.

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