Morgan Stanley made a prediction that around 140 terawatt-hours of electricity this year could be consumed by cryptocurrency miners.
According to Credit Suisse report, the growth of bitcoin mining is not an ‘Environmental Armageddon.’
Bitcoin fever has spread across the entire planet and this ever-increasing dominance of the digital currency as an economic force has a correlative effect on the bitcoin mining industry. As such, the growing popularity and profitability of bitcoin have attracted more miners to the ecosystem.
This increase in the mining activities has caught the attention of environmental activists and critics as this may result in a global energy crisis. Bitcoin mining industry is based on hashpower and this increased hash power has come at the price of increased electricity consumption.
However, according to the Credit Suisse report, the growth of bitcoin mining is not an ‘Environmental Armageddon.’ The new report, in fact, puts aside various apocalyptic predictions.
Recently, Morgan Stanley made a prediction that around 140 terawatt-hours of electricity this year could be consumed by cryptocurrency miners, which accounts for some 0.6 percent of global demand.
As reported by Bloomberg, the Credit Suisse analysts, led by Michael Weinstein, in the report stated, “This is a far cry from the power and environmental Armageddon that some have feared.” On Stanley’s prediction, Credit Suisse believes that in short-run, bitcoin mining is unlikely to cause an “environmental Armageddon.”
To classify an industry as an “ultra-high-end” electricity consumer, it should have 350 terawatt-hours of energy consumption a year. As per this report, bitcoin mining is “very unlikely” to reach this mark. The analysts, however, predict that the mining industry could generate a USD $5 billion “global annual revenue opportunity.”
“This is a small portion of global electric usage and an even smaller portion of total global energy expenditures,” the report added.
The apocalyptic predictions regarding mining’s electricity consumption do not take into account the fact that miners tend to locate their mining activities at locations with low utility rates, so as to benefit from low-cost energy due to an excess supply.
Thus, the environmental concerns regarding this rapidly growing industry will condense with the concentration of mining operations in regions with surplus electricity.
The report further noted that so as to achieve a competitive edge, the industry will develop hardware and practices that are more energy-efficient. This also happened with both marijuana growers and data center operators during high-growth periods for those industries.
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