The mining of the digital currency Bitcoin is enormously energy-intensive. This has now “destabilized” the first power grid. If demand continues to rise, the problems could increase. Because the system has a crucial weakness.
The latest Bitcoin boom is blossoming again: The Iranian government warns that the computers of Bitcoin prospectors are overloading the power grid in the Yazd region of central Iran. A spokesman for the Energy Ministry said late last week that the Bitcoin prospecting had “destabilized” the grid and created problems for consumers.
Iran particularly attractive for Bitcoin prospectors
According to an analysis by the investment bank JP Morgan, the global average price of electricity per Bitcoin at the end of last year was a good 4000 dollars. But when the Bitcoin price plummeted well below the $4000 mark a few months ago, the operation of the mining data centers became unprofitable for many operators.
The operation of the computers, which in addition to the electricity costs also entails high expenditure for the acquisition and constant updating of the hardware, was only worthwhile in China – there the miners buy cheap coal electricity with special contracts directly from industrial power plant operators.
Bitcoin is therefore the dirtiest and most climate-damaging digital currency in the world. According to a study by the Technical University of Munich, the global CO2 emissions caused by the energy consumption of the Bitcoin mines amount to a good 22 million tons of CO2 – for comparison: a country like Denmark has annual emissions of around 35 million tons.
Iran is particularly attractive for Bitcoin miners because the state energy providers offer numerous special tariffs for factories and even supply schools and mosques with electricity for free. The operators of the Bitcoin mines are correspondingly creative in their choice of locations.
But at least in Iran, Bitcoin mining is now more difficult – the state energy network operator Tavanir has warned on the occasion of the state closure of two unauthorized Bitcoin data centers, each with a good 1000 computers, that mining with state electricity is not permitted.
Mining greed could be over in 2032
In China, on the other hand, they would probably just laugh at over 1000 Bitcoin computers – Bitcoin data centers with tens of thousands of computers are not uncommon there. The operators in northern China and Inner Mongolia obtain their electricity directly from power plants built to operate energy-intensive industries such as aluminum smelting.
In the spring, Chinese operators temporarily move their complete data centers to Szetschuan in southwest China, where the spring floods make electricity from hydroelectric power plants extremely cheap. However, in view of the exorbitant power consumption, the Chinese government is no longer willing to sit back and watch the mine calculations using digital coins – and threatened to close down the plants at the beginning of the year.
If Bitcoin continues to be mined at the same rate as before, then the cost of energy will continue to rise – until the cost is back at the rate of Bitcoin, currently $11,000, and it becomes unprofitable to operate the Bitcoin mines. This cycle will not end until about 2032, when about 99 percent of all mathematically possible 21 million Bitcoins should be calculated. Mining will then no longer be worthwhile.