Bitcoin (BTC) mining has a reputation for being costly, both for the miners and the environment. The computing power needed to mine BTC is insane. To mine one BTC, it’ll cost 155,000 kWh. And that’s an estimate. Some computing systems that aren’t efficient will likely take more. In the US, there was an estimated charge of 16.92 cents per kWh. Doing the math, that means it costs $26,350.
Still, we guess it’s worth the money for the miner if the current BTC price is $41,399.10. Who doesn’t reap the rewards? The environment. And BTC is just one part of the mining problem. Ethereum is similar. But there are options like mining Solana (SOL) – it’s free on platforms like Binance, and the Solana price prediction 2025 is good.
Why aren’t more people doing that? Because it takes some effort, and it’s easier to trade against cryptocurrencies.
And then we move on to AI. AI and the processing power it’s taking is crazy. It’s eating away at data centers and churning out massive electricity usage numbers.
Funnily enough, if you read the news, it’s not the earth people are worried about, it’s the toll it’ll have on the electricity grid and whether it’ll be able to cope with surging energy demands.
Read On To Find Out More
Cryptocurrency Energy Demands
The energy appetite of cryptocurrency mining operations is unfathomable. The average annual electricity consumption of the bitcoin network is around 129.47 TWh. It rivals the energy use of entire countries like Sweden. Crazy.
The sheer magnitude of this consumption raises eyebrows and environmental concerns. Mining involves the acquisition of potent ASIC miners, which can range between $3,000 to $5,000 for top-end models, and the energy supply, cooling systems, and operational management.
It’s an expensive game.
Does Proof-of-Stake Make it Better?
The cryptocurrency community is at least doing something to make a difference. Or at least, they’re trying. The swap from a Proof-of-Work consensus to a Proof-of-Stake (PoS) network is one example. Ethereum did it recently (ish) and it did make a big difference with their Ethereum 2.0 upgrade
It’s eliminating the need for energy-intensive mining, and PoS significantly reduces the carbon footprint of blockchain operations.
However, Bitcoin, the largest cryptocurrency, remains on the Proof-of-Work model, continuing to draw significant energy for its mining processes. That could change soon, but bitcoin has bigger plans with its spot ETF release.
What About AI?
The relentless AI advancements necessitate ever-expanding data centers. They’ll be consuming 1,050TWh of energy by 2026. It’s fueled by AI growth – the basic algorithms and intricate labyrinths of neural networks like ChatGPT that test the limits of our existing computing infrastructures and energy provisions. Well, ChatGPT fuelled the problem. It’s the reason everyone knows and wants AI.
With AI, the appetite for data processing power is impossible to avoid.
And the thing is, AI applications are now everywhere. From healthcare diagnostics to autonomous vehicles, we can’t stop now we’ve started. If anything, industries have the AI ‘bug’ – they want the applications to make their business better.
Can Data Centres Cope?
The question of whether data centers can sustainably manage the escalating demands placed upon them is becoming increasingly critical. The US, as a global leader, housing 33% of the world’s data centers is at the forefront of this challenge. Is it coping? No.
The IEA’s projection indicates a big rise in data center electricity consumption in the US. It goes from approximately 4% in 2022 to an expected 6% by 2026. That proves the necessity for innovative and sustainable energy solutions.
The strain on electrical grids, especially in tech giant areas like Texas, and the associated risks to aging infrastructures are becoming hard to ignore. There’s a rapid growth in technologies like AI and cryptocurrency mining that we almost can’t cope with.
And that’s the problem. The planet can’t cope. The energy demands are not just numbers on a chart. They translate to real-world challenges in energy supply, grid management, and sustainability practices.
What About The Planet?
The planet is suffering. The carbon footprint associated with bitcoin transactions, for instance, is alarming. Not mining. Transactions. And ethereum is worse.
A single transaction’s carbon footprint is equivalent to thousands of Visa transactions or hundreds of thousands of YouTube video hours. Those numbers are insane. And the specialized hardware used for mining is quickly turning into electronic waste, contributing to the growing global crisis of e-waste management. But e-waste management is another story.
This electronic detritus clogs landfills and leeches hazardous substances into our soil and water.
The urgency to address these environmental ramifications is clear. But that’s not to say that cryptocurrency or AI is negative – there needs to be more strict management of the environmental impact.
We can see why people want to mine coins like bitcoin and why people are using AI. Since ChatGPT, AI use should increase 37% Every Year From 2023 to 2030. The staggering energy demands and environmental impact that will come with that are insane. The two industries alone could allow the earth’s temperature to rise about the dreaded 1.5 degrees. Combine it with other industries, like industrial manufacturing, and it’s inevitable.
Something needs to be done, and regulations must change.