It is often said that mining Bitcoin is not profitable. This is largely due to the high cost of energy required to mine Bitcoin.
The estimated annual electricity consumption of the Bitcoin network is about 32TWh, which is about as much as the entire country of Austria. In order to put this into perspective, we will need to understand how much energy it takes to mine a Bitcoin.
The first thing we need to know is that there are two types of miners: those who mine for themselves and those who mine for others (pools). The former are called solo miners and the latter are called pool miners.
The second thing we need to know is that there are two types of mining: Proof-of-Work (PoW) and Proof-of-Stake (PoS). PoW is the most common type of mining, and it is what we will be focusing on in this article.
PoS is less common and will not be discussed here.
The third thing we need to know is that there are two types of PoW mining: ASIC mining and GPU mining. ASIC miners are purpose-built machines that are designed for mining Bitcoin.
They are very efficient and can mine Bitcoin much faster than GPU miners. However, they are also very expensive, so most people opt for GPU mining instead.
So, how much energy does it take to mine a Bitcoin?
For solo miners, it depends on how fast their computer can solve the algorithms necessary to mine Bitcoin. For pool miners, it depends on how fast the pool’s computers can solve the algorithms necessary to mine Bitcoin.
In either case, the answer is a lot! It takes quite a bit of energy to run the computers required for mining Bitcoin. In fact, one study estimates that the annual electricity consumption of the Bitcoin network could be as high as 32TWh, which is about as much as the entire country of Austria!
Clearly, mining Bitcoin is not a very environmentally friendly endeavor. If you’re concerned about climate change and want to do your part to reduce your carbon footprint, you might want to avoid mining Bitcoin entirely.