Crypto-Mining Machines Can Rocket Your Energy Bill and Works an “Interest” On Mining
In a recent Inc article, author Tom Popomaronis picked up the Green Team story by bringing awareness to the potential effects of high volume crypto data mining and its impact on power consumption.
Cryptocurrency is the no longer stranger to us. The recent boom in this digital currency has taken everyone by surprise, and more people are joining this race to mine the new coins every day. On the face, it might seem straightforward way to earn money, where you will just set up your mining rig and forget about it and will receive a steady income with minimum fixed income. But this is not that simple. Simple however it may seem, but it has some variables costs attached to it which we tend to overlook. Be careful as the mining rigs are steadily skyrocketing your bills and here is why it is so.
The value per watt has gone down
Cryptocurrency is mined as a result of your computer solving a math problem. Miners solve the math problem using the computational resources and by expending energy. Back in days, in the start of the bitcoin era, the amount of energy and computational power required to solve a math problem to generate a coin was less but with the flux of people flowing through this network, this difficulty has increased and it needs way more energy than it used to solve the new math problems.
So, with more energy spent and decreasing values of cryptocurrency, the value per block as compared with the energy has gone down and it is adding to your electricity bills without your knowledge.
Overall Energy consumption
The average energy consumption by bitcoin network is 2.55 Gigawatts. To give you a better idea, the average consumption of Ireland is 2.85 gigawatts. So, currently, bitcoin network, which is one of many cryptocurrency networks out there, is spending energy as high as a country. Furthermore, it is anticipated that by the end of the year 2018, it will increase by two folds. So, perhaps it is about time that mining of these coins is put to halt.
Miners are now inefficient
With the increase in difficulties in algorithms, now same miners who used to take let’s say 100 kW to produce a coin, now same energy consumption only produces even less than half of the coin. So, therefore, the new energy consumption is leading to lower revenue generations, and it is racking up the energy bills.
Is it worth it?
The fundamental question, is it worth spending this much resources on energy for the cryptocurrency? Do we have any evidence of the cryptocurrency millionaires giving back to the charity? Do we have any concrete data that shows that people from developing countries are escaping inflation? No, we do not have the data that indicates that these cryptocurrencies have changed the world for people. So, spending all that money on energy is not worth it if it is not bringing any positive change to the world.
Keeping aside the macro perspective presented above, the electricity costs of individual miners have gone up by many folds. Not to mention that this mining any coin has become a gamble where any lucky miner gets a block of coins making him or her rich. So, to win, you have spent more energy and buy more mining rigs. Not to mention, they will increase your bills. With more energy being expensed, your electricity bills will start to climb naturally.
Given all these points, it is about time we took some to reflect on our cryptocurrency race. Is it really worth spending so much money on energy especially when we are facing severe climate changes?