This can't be right, can it? According to Adam Rogers at Wired, bitcoin production is so energy intensive that in two years it will consume energy equal to all of the energy currently produced in the United States. The idea is that big computers have to work a long time to generate a bitcoin, and it costs money and energy to operate big computer. According to Mr. Rogers, it is a lot of energy. But really, how could it be that the entire energy output of the United States is needed to generate bitcoins??
Dude, when you get an answer that weird, you need to look for a catastrophic error. As I review the article, the first thing that catches my eye are that power and energy are confused, as are "hashes" and hashes per second ( a hash being related to operations carried out by a computer).
Rogers says that bitcoin production involves 0.3 Wattts per billion hashes. I think he means 0.3 Watts per billion hashes-per-second. Anyway, I went onto the Bitcoin website to see.
They say it Bitcoin prodution i currently (Dec 16 2017) associated with 4730 GHash/sec corresponding to 1293 Watts. Physics majors will recall Watts = Joule/sec and it is an energy consumption rate. OK so the energy associated with computer operations is equal to 0.27 Watt*sec/GHash. OK that's where the 0.3 Watts per billion hashes comes from, but the unit is wrong.
Now, however comes a major problem: he inverts the numbers and comes up with 300 GHash/sec per Watt. If I understand correctly, this time the unit is correct, but the number is wrong. When I divide a billion by 0.3, I get 3 GHash/Wsec, not 300. Oops! Well, right there it's only 1% of the country's energy, not 100%. But let's follow the rest of the calculation.
Mr. Rogers then throws numbers around: 13,600 PetaHashes (1 Peta = 10^15), and 234 kWH. I'm not sure what those number represent, but let's calculate the energy and average power required to create 1 bitcoin, and then the remaining 5 million or so over the next two years. The previous linked website gives us three numbers ($0.12 per kWH, 0.2729 Bitcoin per year; $ 1,359.20 energy cost per year. If this is representative of 21 Million bitcoins, then
1 bitcoin = 1359.20/0.2729 = $4980.58
Energy to produce 1 bitcoin = $4980/0.12 = 41,504.82 kWH
The total remaining production history of Bitcoin is supposed to be 5 Million additional. So the total cost to produce these wonderful treasures is $4981 * 5e06 = $25 billion dollars.
The energy corresponding to this production process is 210 billion kWH. In round terms, the US consumes about 4000 Terrawatt-hours per year. If the production run lasts two years, Bitcoin production corresponds to 0.000026 of the energy output of the United States, rather than 100% as was claimed. In other words, the energy production of the US is 40,000 times larger than the energy needed by Bitcoin, by my estimation. That's still a ridiculous amount of energy to wasted on financial speculation, but it does not threaten the survival of the economy.
So, there's my answer. I won't swear to be error free, partly because I don't completely understand how bitcoins are produced or mined, and so I don't know where Mr. Rogers got his numbers or what they mean. But common sense says that if the sensational claims were true, there would have to be power plant after power plant being built to power planetary-sized computers. I mean, come on.
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