Bitcoin miners are devouring energy at a record pace during the crypto runup

In the past year 13 top mining companies have placed over $1 billion in orders for specialised computers.After recovering from a near-death experience during the most recent crypto winter, Bitcoin miners are back in survival mode — spending billions of dollars on equipment and drawing energy at a record pace ahead of an update in the digital currency’s code that threatens revenue streams.

The machines are being purchased to help miners increase efficiency for their operations and lock in favourable electricity rates. Miners are in constant search of cheap power because they use energy-hungry computers to validate records of transactions on the blockchain to earn rewards in the form of Bitcoin.

"If we assume power draw was consistent over the course of the month, we can multiply by 696 to get 13.64 TWh of energy consumed by the Bitcoin network over the course of last month," said Coin Metrics Senior Solutions Engineer Parker Merritt. Bitcoin mining consumed 121 terawatt-hours of power in 2023, the Cambridge Centre for Alternative Finance estimates — similar to Argentina’s use.

"The most efficient miners will benefit the most as the increase in Bitcoin price will push even more profits to the bottom line," said Bradford.Miners are constantly competing for a reward since the network only gives it to the first to successfully process a unit of data. The fierce competition is evidenced in mining difficulty, a measure of the amount of computing power to mine Bitcoin.

"There is a danger in which you scale and start compromising on the cost of energy, the cost of machines and the costs of certain paybacks," Genoot said."That’s why so many companies went bankrupt in 2022 because people would scale at all costs."

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