A recent study on the energy consumption of Bitcoin transactions revealed that the digital currency may consume as much electricity as Denmark by 2020.
Analysts are calling the cryptocurrency’s current consumption of energy unsustainable and suggesting that if the currency is to survive, it will have to adopt new energy-efficient technology.
Researcher Sebastiaan Deetman came to the conclusion that at bitcoin’s current level of expansion, it will require 14 gigawatts of electricity to run by the year 2020 — an amount of energy equivalent to that of a small country, like Denmark. At the current time, a single bitcoin transaction requires as much electricity consumption as the daily consumption of approximately 1.6 American households.
Bitcoin, which is transacted through a series of decentralized network connections, is currently consuming approximately 350 megawatts throughout the global netowrk — the equivalent of 280,000 American households. The increasing concern about energy consumption is forcing cryptocurrency advocates to reconsider Bitcoin’s internal structures.
Projects seeking to address concerns with Bitcoin’s energy consumption have begun to emerge, many of which have established proposals that could drastically decrease the amount of consumption. Deetman forecasts that an implementation of the proposals to fix the transaction ledger could lead to a Bitcoin network in 2020 that only consumes 417 megawatts, or 3% of the his original pessimistic prediction.
However, even in this optimistic scenario, the mining of one bitcoin in 2020 would still require a significant 5,500 kWh, or half the annual consumption of a single American household. If Bitcoin usage continues to grow at its current rate, the worldwide Bitcoin network by the end of 2016 would require more energy consumption than is currently generated globally.
The success of digital currency has always been predicated upon the ability of its designers and advocates to appropriately evolve and adapt. Although current forecasts suggest that change is necessary, Bitcoin’s foundation on progressive experimentation suggests that the cryptocurrency will live on to see it’s next chapter.