Bitcoin’s energy use drops following price plunge

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After taking a nosedive in June, the price of Bitcoin has stayed so low that it is forcing the network to use less electricity. Alex de Vries, a digital currency economist, says on his website that over the past couple weeks, the energy consumption of the digital currency has dropped by more than 30%.

The process of mining new token has alarmed environmentalists and consumer advocates concerned about pollution. Through an inherently energy-inefficient process, miners earn new token by solving puzzles. The energy appetite of nations has been surpassed by the computing power of all those machines.

On June 11th, the annual energy consumption was 204 TWh, but it fell to around 132 TWh on June 23rd. Its electricity use is still very high even though it has fallen.

The value of the network affects the amount of energy used. The more valuable it is, the more incentive there is for miners to expand. The price of the digital currency peaked in November of 2011. Between 180 and 200 TWh was estimated by de Vries since that peak. All the data centers in the world use the same amount of electricity.

Because the price stayed above a key threshold, there wasn't an immediate drop in energy use. The research states that if the price stays above $25,200, the network can sustain mining operations that use up to 180 TWh annually. Since miners have already invested in their machines, they will probably keep them running as long as they can make money.

If the price of Bitcoins gets too low, miners will lose money in electricity costs. We are starting to see older machines that are becoming unprofitable being paused or retired. Since June 13th, the value of the digital currency has been below the threshold. De Vries said that it was becoming more challenging for miners. Their day-to-day operations are going to be impacted by it.

It's not just the digital currency, it's also other things. The same process is used to keep the ledger. The price has plummeted this month as well, but has rebounded over the past week. Yesterday was half of what it was in May.

Cryptocurrencies have been cleaned up. They don't use puzzle-solving to verify transactions, which is why they are less energy intensive. Skeptics are still worried about the impact of miners competing with residents for electricity in a scenario where renewable energy is used. There is a proposal to figure out how to eliminate emissions. The problem they are trying to solve will continue as long as some of the other technologies eat up a lot of power.