How Many Barrels Of Oil Are Needed To Mine One Bitcoin?

[BADecker]

How Many Barrels Of Oil Are Needed To Mine One Bitcoin?

James Stafford, editor of Oilprice.com not only does the math, but explains the energy-driven geographic arbitrage currently driving bitcoin mining.

The bitcoin boom is well and truly underway, and investors are constantly looking for new ways to gain an advantage in this space The best way to do this, it seems, is by cutting the energy costs of mining this precious commodity. The bitcoin mining industry consumes 22.5 TWh of energy annually, which amounts to 13,239,916 barrels of oil equivalent.

With 12.5 bitcoins being mined every 10 minutes, that means the average energy cost of one bitcoin would equate to 20 barrels of oil equivalent.

While it's all about where you sit on the cost curve, Stafford provides us with some context on gross energy consumption.

To put this in perspective, the total energy consumption of the world's Bitcoin mining activities is more than 40 times greater than that required to power the entire Visa network.

And it's very profitable...

Read more and click the links at http://www.zerohedge.com/news/2017-10-28/how-many-barrels-oil-are-needed-mine-one-bitcoin.

[BADecker]

No need for a Bitcoin transaction fee. Miners are getting enough from the bitcoins they mine. All the transaction fee might do is speed up the transaction for those fees that are greater.

[tiger2monkey]

Surprised to read that "the average energy cost of one bitcoin would equate to 20 barrels of oil equivalent." and that "it consumes more than 40 times energy than entire visa network." However, it is still very profitable for miner as one bitcoin can buy 100+ barrels of oils. Hope something can be done to save the energy, such as switching from POW to POS.

[davis196]

Interesting comparison,but unfortunately mining bitcoin is still not very environment-friendly.
We need technologies that will produce 100% clean and cheap electricity.
If we spend 40 times more energy mining compared with the visa network,this is a problem and we
need to improve our energy consumption a lot.

[hualangktsld841]

Not long, Bitcoin prices will be higher and consume more power. I think there will be three or four coins in the future to replace some of the functions of Bitcoin, like ETH, RIP, or XEM. The future world will be a more open world, coins the world is the same.

[Kakmakr]

The comparison is flawed, because they do not take into account the electricity that are not directly linked to the hashing power needed to generate or process the transactions.

How many people work for VISA {Banks} globally, compared to Bitcoin mining operations? How much electricity do these workers use? In 2015, VISA employed 11,300 workers. {They work in offices with lights and air-conditioning and lifts etc...}

Bitcoin mining operations are usually individuals or a small group of 5 to 10 people working in shifts on these mining farms.

See how quickly comparisons can be manipulated to serve a specific agenda? In this article they ignored the other costs, because they wanted to highlight how energy efficient VISA and other payment systems are, compared to Bitcoin. In my opinion, they failed.

[bitalive]

The comparison is flawed as they do not take into account the electricity that is not directly linked to the hashing power needed to generate or process the transactions.

[btcbrother]

Probably a lot less than one. Last I heard it cost about $1,000 US to mine 1 Bitcoin.

[jseverson]

Wow, that's insane. But then again, 1 Bitcoin is valuable enough to buy 20 barrels of oil right?

Still, this is one of the less documented cons of Bitcoin. I have heard that the electricity consumption of all miners in the world is enough to power small countries. The good in this, though, is that once every coin is mined, there won't be a reason to mine ever again, as opposed to fiat which has to be trashed and remade.

I still can't figure out whether it's bad overall or good overall, compared to fiat.

[TheDarkVoice]

But the energy for mining bitcoin is not only produced from oil. You can produce energy from many other things, like air, water, solar energy, radioactive etc. Indeed, we waste energy to create something we made, it is a waste. But, at the level we are, we can permit ourselves to do that.

[Iranus]

Seems like quite an arbitrary statistic.  Not all power is produced using oil.

If you wanted to understand how many resources that mining Bitcoin takes up, you'd have to understand what power sources are most commonly used for BTC mining.  Presumably the most common is mains power, in which case you'd have to consider what percentage of mains power in different countries is generated by different power sources.

After that you'd have to alter your statistics based on the percentage of hashrate which is directed from different countries - something that's very hard to measure.

It's almost impossible to create accurate statistics of how many resources BTC mining actually takes up.  You could take the least efficient power source and say that mining 1 BTC takes up that many resources even though most power isn't created that way.

[whitemacna]

With 12.5 bitcoins being mined every 10 minutes, that means the average energy cost of one bitcoin would equate to 20 barrels of oil ...

[salihno71]

I'm quite sure that some percent of miners is running on solar. https://bitcointalk.org/index.php?topic=1812198.0 Is there some kind of statistics about this?