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Unless BTC reaches $2M, bitcoin mining will use less than 0.5% of the world’s energy.

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According to new projections by Arcane Research, Bitcoin may consume a significant amount of energy in 2040, but only if its price reaches several million dollars.

According to new estimates by Arcane Research, Bitcoin (BTC), the most valuable cryptocurrency in the world, has the potential to consume a lot of energy in the future, but only if it reaches several million dollars.

A report estimating the growth in Bitcoin’s energy usage toward 2040 was released on Monday by the crypto research and analytics company Arcane Research.

According to the report, which was written by Arcane Research analyst Jaran Mellerud, the future energy consumption of Bitcoin will vary greatly depending on its price as well as other factors like transaction costs, electricity costs, and others.

According to the report, if the price of BTC rises to $2 million in 17 years, it may consume 894 Terawatt-hours (TWh) annually, a tenfold increase from its current usage. Despite tremendous growth, the analyst predicted that such energy consumption would only make up 0.36 percent of the estimated global energy consumption in 2040, up from Bitcoin’s current share of 0.05%.

“At the moment, Bitcoin miners spend about 50% of their income on energy based on their 88 TWh energy consumption and an average energy price of $50 per MWh,” Mellerud stated.

Less bullish scenarios would result in much lower energy consumption for bitcoin in the future. By 2040, the price of BTC must reach $500,000 in order for the cryptocurrency to use 223 TWh annually. The report states that if Bitcoin trades at $100,000 in 17 years, mining BTC would only use 45 TWh annually.

oSource: Arcane

The analyst continued by highlighting the significant effects of the Bitcoin halving, a quadrennial event that results in a 50% decrease in the block reward for miners. The report claims that because of the halving, the price of bitcoin must be increasing very quickly and that the halving’s “mitigating effect” can be countered in the future by rising transaction fees. According to Mellerud, “Such an increase will only occur if there is a significant demand for using Bitcoin as a payment system.”

“The Bitcoin price depends on the market demand for Bitcoin as a store of value, while the transaction fees are driven by the usage of Bitcoin as a medium of exchange.”

The report also asserts that Bitcoin’s energy consumption won’t be significant until Bitcoin succeeds as money, as serving as a store of value and a means of exchange are two of money’s most crucial roles.

They shouldn’t be concerned about Bitcoin’s energy consumption because many BTC skeptics think that such a scenario is improbable, Mellerud gave a cue by saying:

“I have good news for those of you who want to see Bitcoin’s energy consumption decline: You can relax in your armchair, because your wishes will be fulfilled if Bitcoin fails as a monetary system. And you believe Bitcoin will fail, don’t you?”

Due to the ongoing cryptocurrency winter, the Bitcoin mining sector saw a significant decline in 2022, with many major cryptocurrency miners choosing to sell their BTC holdings rather than shutting down. Regulators have put pressure on mining companies in the US as well; US lawmakers have asked for data on energy usage from four significant BTC mining companies.

Many Bitcoin miners remain upbeat about Bitcoin’s short- and long-term price outlook despite the increasingly bearish environment. In the long run, the mining industry is a “healthy and profitable business,” according to Canaan Senior Vice President Edward Lu.

 

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