Care to guess how many cryptocurrencies there are?
If you include non-native tokens (typically dubbed “ICOs”), there are over 1,600 in existence worth around $370 billion in market cap.
And, despite lots more competition than ever before, the king of the crypto hill in terms of market cap and popularity is still Bitcoin.
There are multiple ways you can buy cryptocurrencies. For example …
- You can use fiat money. Or you can exchange one cryptocurrency for another.
- You can buy and sell on a crypto exchange. Or you can do it over the counter — directly from someone you know or meet on social media sites devoted to peer-to-peer crypto trading.
- You can also acquire cryptocurrencies by mining them … or by doing other kinds of work in exchange for crypto rewards.
Regardless of which method you use, every transaction involves high-powered computers — especially the mining. And those transactions, can often use lots of electricity, especially for Bitcoin.
How much electricity?
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A new study from Joule estimates that the entire Bitcoin network consumes about 2.55 gigawatts of electricity today and could reach to 7.67 gigawatts by the end of the year.
To put that in perspective, that makes the network comparable with countries such as Ireland (3.1 gigawatts) and Austria (8.2 gigawatts).
Another study forecast that Bitcoin energy consumption will double EVERY six months and could reach the annual consumption of the Czech Republic before the end of 2018.
Bitcoin is a veritable energy Godzilla.
And hold on. That could be just the tip of the electricity iceberg. Economist and blockchain specialist Alex de Vries forecasts that cryptocurrencies will consume as much as ten times more as its popularity grows.
In fact, this huge consumption of electricity is one of the factors that leads Juan Villaverde to the conclusion that the best cryptocurrency alternatives are those with significantly lower electricity consumption.
Or that don’t use this kind of mining to begin with.