Mining power working on Bitcoin has been rising steadily over time.
Hash rate is a measure of mining power. Hash rate measures the combined computational power provided by all miners to validate transactions and mint coins on Bitcoin. The higher the hash rate, the higher the number of miners working and competing against each other.
When there is more competition, miners must increase their computing efforts to get the same amount of bitcoins. Hence they increase their energy consumption.
I have estimated the effect of an increasing hash rate on Bitcoin’s energy consumption.
For the estimation, I have simulated state-of-the-art mining hardware (Antminer S19 Pro) that requires a power usage of 3,250 W to feature a hash rate of 110 Terahash/second (TH/s).
One important metric in mining is the effectiveness of the mining hardware. Power Usage Effectiveness (PUE) is the ratio of the energy consumed by the mining facility to the energy consumed by mining. The higher this ratio, the higher the energy consumption to mine the same number of bitcoins because cooling equipment and auxiliary uses demand some of the energy.
The table below shows the energy required to mine 1 bitcoin based on 2 variables: the Bitcoin network hash rate and the PUE of the mining equipment.
As of September 27, 2022, the Bitcoin hash rate is ~205 EH/s. Assuming a PUE of 1.2, a bitcoin miner would consume ~195 MWh to mine a single bitcoin. However, the overall average of mining equipment tends to be around 1.8. Such a high PUE implies an energy consumption of ~291 MWh to mine the same bitcoin (50% higher).
To put it in perspective, 195 MWh is the equivalent consumption of 18 American homes in 1 year.
As a side note, Data Tables in Excel is a terrific tool for this kind of analysis.
If you are interested in downloading the Excel file used to calculate this estimation, please subscribe to my newsletter: