That Bitcoin consumes more energy than pretty much all cryptocurrencies is known to us. How much more? Think 30 times more electricity than all the Tesla cars in the world today.
This has been revealed in a new report by Morgan Stanley, who revealed that Bitcoin mining now guzzles up more electricity than electric vehicles in the world. And what’s more, the power demand for Bitcoin is set to more than triple in 2018.
The original cryptocurrency will consume as much energy in a year, as the entire nation of Argentina.
The bank forecast that Bitcoin mining could use up more than 125 terawatt hours of electricity this year, which is a level that electric vehicles will not reach until 2025. Global energy consumption for all electric cars came in about 6 terawatt hours in 2016, for the record.
Last year, Bitcoin consumed 36 terawatt hours of energy, estimated Morgan Stanly, in a research note published on Wednesday.
This is as much energy as the country of Qatar.
Who killed the electric car?
By comparison, all the Tesla cars on the road at the end of 2017 likely use less than 1.3 terawatt hours of electricity combined for the year. This analysis by Fortune took into account the number of Tesla vehicles, which according to estimates come in at 280,000.
The analysis assumed each car drive 15,000 miles, which is roughly the national average, at a rate of 30 kilowatt hours of electricity per 100 miles. This is based on the median mileage rate for Tesla Model 3 and Model S vehicles.
Which is to say that it cost more around 29 times as much energy to produce Bitcoins last year, as it did to power all the Tesla cars.
Users in Tesla online discussion forum are, frankly, surprised.
The reason why Bitcoin mining consumes so much electricity is that producing each coin involves a complex mathematical puzzle. High-powered computers perform this cryptographic process, and these mining computations help verify Bitcoin transactions on the blockchain.
Which is basically a digital ledger.
The downside of this is that this is an extremely energy intensive process — more so when you consider that most cryptocurrencies require much less energy to mine.
Morgan Stanly estimates that it costs anywhere from $3,000 to $7,000 to produce one Bitcoin, and these numbers include both energy and hardware expenses. This means that Bitcoin miners still profit double or more even at the current price of about $13,500.
According to the bank, the process is still very profitable for those that are into it:
“That said, mining is very profitable at today’s bitcoin price, and if cryptocurrencies continue to appreciate we expect global mining power consumption to increase.”
Still, Morgan Stanley analysts do not see cryptocurrency values being driven by electricity costs in the near term. 2017 showed us that crypto prices are not fully based on fundamentals, but this is something that can change in the coming years.
Particularly, as the difficulty to mine a single Bitcoin continues to increase at about 15% a month.
Still, 125 terawatts, though.