Climate Changed
Bitcoin's Exorbitant Energy Costs May Prove to Be Biggest Risk
- Citigroup says long-term consumption comparable to Japan
- Shift in network model seen as key to cryptocurrency’s future
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It may not matter whether bitcoin’s a bubble. The staggering energy costs associated with “mining” the digital currency could prove to be its downfall.
Even as bitcoin flirts with $8,000, the price required for mining to be marginally profitable stands at a jaw-dropping $300,000 to $1.5 million by 2022 based on current growth trends and electricity use, according to Christopher Chapman, an analyst at Citigroup Inc. At that pace, the implied consumption would match that for the whole of Japan over the long haul.