Mining cryptocurrencies is far too energy intensive and is consuming as much electricity as a G-20 economy, International Monetary Fund MD Christine Lagarde said.
“The bitcoin mining, which is this accelerated and augmented use of computers to actually determine the value and incentive the functioning of the mechanism, is energy angry,” Lagarde said in Bloomberg TV interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “And we figure that in 2018, if it continues, that system will actually consume as much electricity as Argentina.”
The electricity needed by the global network of computers running the blockchain technology behind bitcoin has more than tripled in the last year to more than 37GWh/day, according to Bloomberg New Energy Finance. That’s equivalent to about 30 1.2GW nuclear reactors running at full capacity.
While higher prices have spurred more mining, it’s impossible to know where the market is headed, according to BNEF analyst Isabelle Edwards. If prices remain high, energy consumption will do the same. But the amount of electricity needed to mine bitcoin could fall if there are improvements in computing technology.
“In times of climate change and when we look at how much coal is being used in some Chinese provinces to actually mine bitcoin, it’s a big concern,” Lagarde said. — Reported by Mark Deen, (c) 2018 Bloomberg LP