I don’t know what possesses people who don’t understand the advancement of technology to write about the advancement of technology. Bitcoin has been headlining many news sites recently. Most of the headlines discuss the recent crash but Mark Gimein had decided to write about another aspect of Bitcoin, the energy requirements of Bitcoin mining. According to Mr. Gimein Bitcoin mining is an environmental disaster:
Most people aren’t used to thinking in terms of the energy it takes to solve math problems; a few minutes of Excel may not take much energy. But make the problems complicated enough, and things change. “Mining” Bitcoins takes so much processor power that it’s often done with specialized computers optimized for rapid repetitive calculations. So how much power can that take?
Blockchain.info, a site that tracks data on Bitcoin mining, estimates that in just the last 24 hours, miners used about $147,000 of electricity just to run their hardware, assuming an average price of 15 cents per kilowatt hour (a little higher than the U.S. average, lower than some high cost areas like California). That, of course, is in addition to the money devoted to buying and building the mining rigs. The site estimates the profits from the day of mining at about $681,000, based on the current value of Bitcoins. So mining, at least for the moment, is a lucrative business.
The trade-off here is that as virtual value is created, real-world value is used up. About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 U.S. homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.
What Mr. Gimein fails to understand, or at least mention, is that Bitcoin is in its infancy and, like any technology in its infancy, is still running inefficiently. New technologies always start off rough around the edges and improve over time. A majority of Bitcoin mining was originally performed using computer processors. Today a majority of Bitcoin mining is done using graphics cards. Both processors and graphics cards, especially the powerful ones that were and are used by Bitcoin miners, can require a great deal of power. However the technology is improving.
First, let’s understand the the current trend in computing is power efficiency. More computing is being performed on mobile platforms, which need to run off of energy stored in batteries. A mobile phone, for example, doesn’t do much good if it can only run for an hour before the battery goes dead. This is why manufacturers are sinking huge amounts of research and development dollars into making more power efficient chips. Consumers always want more. They want more powerful devices and better battery life. Manufacturers want to make consumers happy because making consumers happy is what nets manufacturers a profit. So we are seeing more powerful processors and graphics processors that also consume less power.
The age of wearable computing is also beginning. Google has introduced Glass, the Pebble watch is selling very well, and there are rumors that Apple is planning to introduce a watch of its own. Wearable computers are even smaller than mobile phones, meaning there isn’t as much room for batteries. When wearable computers begin to take off the demand for even more power efficient chips will increase.
Today Bitcoin mining may take 982 megawatt hours a day. Tomorrow it will likely take less. Not just because of more power efficiency processors and graphics cards, but because current efforts are being focused on Application-Specific Integrated Circuits (ASICs). ASICs are chips designed to perform a specific task. This contrasts with general purpose computing chips such as the processor and graphics card (which are more specialized than processors but still capable of performing other tasks) found in your computer. Because of this ASICs can be designed to use less power. The linked article linked to Butterfly Lab’s website. Butterfly Labs is purporting to build ASICs for Bitcoin mining (I say purported because I know several people who have ordered from Butterfly Labs but have so far received no hardware). ASCIMiner is another ASIC aimed at Bitcoin mining and is powered off of a standard USB port.
Mr. Gimein must believe that Bitcoin miners like sinking vast amounts of money into buying electricity. If that was the case then Bitcoin miners wouldn’t be looking for more efficient methods of mining. But Mr. Gimein’s apparent belief is incorrect, Bitcoin miners don’t like spending great deals of money on electricity, which is why money is being put into developing more efficient mining hardware. Doing more with less has been the trend in human technology. When somebody makes estimations based on current technology they are doomed to fail. One must also predict how technology will advance. The electricity required in Bitcoin mining will decrease as the technology matures.