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.
September was the month of China banning local Bitcoin exchanges. Rumours this was about to happen surfaced at the start of this month, and were soon confirmed to be true. Chinese exchanges subsequently started closing their local activities halfway through the month. This event significantly impacted the number of transactions handled by Bitcoin, reducing the average fee per transaction. The reduction in miner income was, however, offset due to an increase in both blocks mined and price of Bitcoin. The highlights of the past month are as follows:
- Mining revenues increased by almost eight percent.
- Mining revenue from transaction fees decreased by more than 30%.
- The average fee per single transaction was $3.08.
- The total network power consumption increased by almost 6%.
- The average energy consumption per transaction was up by almost 10%, and amounts to 191 KWh per unique transaction (enough to power 1 U.S. household for more than 6 days).
- The number of blocks mined increased by 10%. This is due to miners exploiting the difficulty algorithm of Bitcoin Cash during the previous month, which normalized in the current month.
The full report is featured below:
|Total Blocks Mined||4,868||10.70%|
|Average Bitcoin Price||$4,121||6.65%|
|Average Price Volatility||65.37%||-17.26%|
|Mining Revenue from Fees||$22,833,392||-32.15%|
|Mining Revenue from Blocks Mined||$258,939,444||13.49%|
|Total Mining Revenue||$281,772,835||7.62%|
|Total Costs of Mining||$70,923,812||5.55%|
|Percentage of Total Revenue||25.17%||-1.92%|
|Total KWh Consumed||1,418,476,247||5.55%|
|Network Power Consumption (GW)||1.97||9.07%|
|Total Transactions Processed||7,422,786||-3.92%|
|Average KWh Consumed per TX||191||9.77%|
|Average Fee per Transaction||$3.08||-29.36%|
|Energy cost per TX (at 5 cents per KWh)||$9.55||9.77%|
|Average Network Hashrate (GH/s)||7,808,916,523||23.80%|
|Average Network Effciency (J/GH)||0.25||-11.91%|
|Economic Maximum KWh Consumed||5,635,456,704||7.62%|
|Technical Minimum KWh Consumed||562,218,092||19.82%|
|Maximum Power Consumption (GW)||7.83||11.22%|
|Minimum Power Consumption (GW)||0.78||23.81%|
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 show that Bitcoin has so far consumed as much energy as Panama or Luxembourg consume over a full year, with three 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||Sep vs. YTD|
|Total Blocks Mined||35,259||13.81%|
|Average Bitcoin Price||$2,367||174.10%|
|Average Price Volatility||61.70%||105.95%|
|Mining Revenue from Fees||$147,555,074||15.47%|
|Mining Revenue from Blocks Mined||$1,060,460,404||24.42%|
|Total Mining Revenue||$1,208,015,478||23.33%|
|Total Costs of Mining||$425,824,154||16.66%|
|Percentage of Total Revenue||35.25%||71.41%|
|Total KWh Consumed||8,516,483,084||16.66%|
|Network Power Consumption (GW)||1.53||128.80%|
|Total Transactions Processed||63,054,362||11.77%|
|Average KWh Consumed per TX||135||141.48%|
|Average Fee per Transaction||$2.34||131.62%|
|Energy cost per TX (at 5 cents per KWh)||$6.75||141.48%|
|Average Network Hashrate (GH/s)||5,075,037,537||153.87%|
|Average Network Effciency (J/GH)||0.3||83.71%|
|Economic Maximum KWh Consumed||24,160,309,559||23.33%|
|Technical Minimum KWh Consumed||2,825,641,368||19.90%|
For a daily estimate of Bitcoin’s energy consumption make sure to visit the Bitcoin Energy Consumption Index.