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 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:
|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%|
|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%|
|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%|
|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|
|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%|
|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%|
|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%|
|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.